Let’s hope we don’t get burned by this Ring of Fire

The Ring of Fire — it sounds alluring and exciting. And for close to 100 exploration companies it is. They've been staking claims in a whirlwind across the muskeg swamps of the James Bay lowlands of Northern Ontario.

Mining speculators and other investors — forever chasing the elusive pot of gold at the end of the rainbow — are upbeat about a potential economic boom, not only for the North but for the province as whole.

There's talk of building year-round roads, rail lines and power lines into the resource rich region. Even of new or expanded shipping ports on the Great Lakes to export the ore and minerals yanked from beneath the boggy ground.

The government too is ecstatic. Already carving off better than 10 per cent of the profit from the recently opened Victor diamond mine in the region, supporting a new Northern mining boom was part of the Liberals recent Throne Speech. Finance Minister Dwight Duncan and Premier Dalton McGuinty can easily be visualized rubbing their hands in glee at the prospect of fresh revenues to help paydown the massive deficits they've incurred and the growing provincial debt, as well as help fund any number of new spending schemes. For those who don't recall, they established a special tax for the Victor Mine in the 2007 budget — double the rate applied to profits at other mines in the province.

But before everyone breaks out in rousing chorus of "Happy days are here again" as they dance down Bay Street, a douse of cold water reality is needed.

No mines yet

First, claim staking does not a mine make.

The Ring of Fire activity is all based on a few enticing findings from drilling done as part of the Victor Mine development a mere three years ago.

Followup drilling heightened the excitement as high levels of nickel, copper, platinum, palladium and chromite were indicated. But much more work needs to be done before dreams of another long-lasting Sudbury basin or Red Lake gold field are proven true.

The finds could be busts — high in quality but insufficient in total ore amounts to justify the expense of remote mining.

Folks in this part of Northwestern Ontario should be well aware of that. Staking, drilling and even ore sample milling have been underway at several sites — both new and old — in the Kenora and Rainy River Districts for the better part of three decades. There's no actual mine yet at sites like Cameron lake, Shoal Lake, or anywhere else for that matter.

Even if the Ring of Fire drill hole finds prove out, the deposits may only support a short term operation. DeBeers' Victor Mine, which started the Ring of Fire rush, is only projected to run for a dozen years before closing down in 2020.

Remember the Hemlo gold field, or the Mattabi Mine north of Ignace. Much hype, followed by a decade or two of feverish ore extraction with a huge boost to local economies, then the bust.

Hemlo and Mattabi are no more. Hemlo's major mines are pretty much closed down now and Mattabi was closed over a decade ago.

Then there is the First Nation question.

The Victor Mine is open and DeBeers is polishing stones from it for sale on the retail market because they worked successfully with native communities in the region. Others seem intent on confrontation rather than negotiation.

It was only last year that a three-year Planitex-Kitchenuhmaykoosib Inninuwug (KI) standoff was resolved with a $5 million-plus taxpayer settlement to the company. The company had run afoul of the KI band as it looked to find enough platinum to justify opening a mine. Band leaders were jailed at one point by the province for civil disobedience and in the end no one got anything — no jobs, no economic spinoffs for KI, no tax revenues for the province — meanwhile the taxpayers picked up the bills for the entire fiasco.

There are already similar rumblings about the Ring of Fire.

Several bands blockaded their airfields for two months from mid-January to mid-March, denying access to exploration companies. They're upset over a cavalier attitude, lack of consultation, recompense and concerns over environmental damage from the Wild West approach to their traditional stomping grounds being displayed by some of those staking claims and setting up drilling rigs.

A lifting of the ban last week was hailed by provincial politicians and mining firms as a step forward, but it came with a caution from native leaders that they expect progress on talks with those involved in exploration and development on their traditional lands.

You can't blame the First Nations, like others in the North, they want a share of the potential mineral wealth and economic spinoffs, including jobs, that everyone's so upbeat about and don't want a legacy of social problems and environmental damage.

Whether the current flurry of Ring of Fire prospecting activity ends in working, profitable mines like the Victor project, or just leaves a bad taste as the Planitex debacle did, is an open question. As is the long term nature of the mineral finds being talked about and the hoped for sustainable development it will bring.

For a province looking to strike it rich in the North — as they say in Hollywood — don't quit your day job.

bstewart@bowes.com