In Northern Ontario is located the Ring of Fire, a geological feature in the James Bay Lowlands that holds a massive chromite deposit and a nickel-copper deposit known as the Eagle’s Nest. Exploration in 2007 led to the discovery of these ore deposits and they have yet to be mined. The area is remote from existing infrastructure with the nearest “town” of Nakina more than 300 km to the south.
Local indigenous communities such as Webequie have very small populations. Webequie, for example, is home to less than 1,500 Ojibway.
To mine the ore from the Ring of Fire will require a railway, a roadway and electrification. Early estimates of the cost for such infrastructure were $2-$4 billion and were scoffed at as being too high. Now the cost estimates are starting to trickle in.
To build a hydro line into the Ring of Fire is estimated to cost about $1.7 billion.
https://www.linkedin.com/pulse/ring-fire-electrical-infrastructure-capex-study-finds-kevin-thomsen
The so-called “massive nickel deposit” that is the Eagle’s Nest is estimated at 20 Mt. This compares to Voiseys Bay at over 100 Mt, Thompson Manitoba at over 200 Mt and the mighty (now mostly mined-out) Sudbury Basin at over 1 Bt (B=billion).
The total cost to provide infrastructure to the Ring of Fire will exceed $4 billion – easily. The total value of the Eagle’s Nest has been estimated at $5-$7 billion in-situ (as if the ore was sitting on the ground processed and ready to ship to eager markets). The cost of mining is typically 50% of the value of the ore. This means the nickel deposit will be mined by an Australian company at a gross profit of $3.5 billion for infrastructure costs of $4 billion (and more).
It is very likely the project will go ahead. I just thought the fine taxpayers of Ontario would want to know that $4 billion of their tax revenue is being spent on a few thousand people in Northern Ontario and an Australian mining company without any discussion of who will pay to maintain the infrastructure after the mines have closed.
Long term planning has been absent in Canada most of my life. No reason to change that now is there?
(I thought there were also diamonds.)
Well you may as well make a port in James Bay, maybe a canal system along one of those rivers that flow north for boaters/fishermen…because if you build it they will come.
MMT means never having to pay your debt.
The only operating diamond mine was Victor, near the community of Attawapiskat and operated by DeBeers. It closed in 2019.
https://www.cbc.ca/news/canada/sudbury/debeers-closure-community-reacts-1.4386145#:~:text=DeBeers%20announced%20this%20week%20that%20the%20province%27s%20only,about%20100%20of%20those%20workers%20are%20from%20Attwapiskat.
There are 15 known kimberlite pipes in the area but none as valuable as Victor (the rumour is DeBeers went through the alphabet and Victor was the “v”-th – or 22nd – kimberlite pipe they found – alpha, bravo, charlie…etc).
“The mining company gives the First Nation $2 million dollars every year through its impact benefit agreement, and covers about 90 per cent of the $7 million it costs to maintain the James Bay ice road, Gull said.’
Gull was the chief of Attawapiskat First Nations in 2017 when the above article was written. The financial statements of Attawapiskat used to be available online. Their annual budget (Federal and Provincial payments) was over $40 million per year for a settlement of about 850 people (about $200,000 per household per year).
One of the dirty secrets of First Nations impact benefits arrangements is many of the companies are owned by individuals and not directly through the band. This creates 2 separate outstretched hands, each wanting the same piece of pie. If you are dumb enough to make a deal with individuals, you end up regretting it later because the band office always wins in the end.
It’s time to have a taxpayer blockade of this project. It works for the greens and the natives. At worst it will show us if we have any remnant of rights left in this country.
Wow raping the tax payer so a rich corporation can shift the costs to the unwashed masses. We see this over and over, wonder how much they donated if any to Ford’s re-election fund?
It’s spending ten to make one under the guise of a prosperous economic outcome.
The average taxpayer remains baffled by BS and see this as a win win, despite the fact that taxes on the wages of the miners and the royalty taxes will never equal that of the cost of infrastructure.
Taxes, paid by those individuals building the infrastructure are not in any sense real, as they are derived from government revenue. Government revenue, for the most part, is money stolen from the makers of widgets.
Widgets are any item that has intrinsic value in and of itself.
Paying taxes on wages, when the wage is paid by non productivity, is a fool’s game, but gives the illusion of equal value of service, so it will be hyped as job creation.
Welcome to the Newfy welfare state!
The thing about diamonds (and gold, up to a point) is that you can fly out the product. Nickel, copper and chrome are bulk materials of far lesser value by weight so the only economical way to transport is by rail. As a geologist with 35 years experience, and as someone who has worked in the ring of fire I can testify that this thing is a massive boondoggle. If you need to be convinced have a look at Google earth. See all that water? String bogs and swamps do not make for an easy place to build a railway. I have doubts whether it’s even technically feasible at any cost. Unfortunately decisions are made in Toronto and Ottawa by people who think the north is Algonquin Park. A swamp is a great place to dump tons of cash, never to be seen again.
It’s feasible to build the railroad, technically… cost wise, it’s like building a 350km long bridge
though it may be better to just dredge and expand the attawaspiskat river and use barges to get it out.
Either way it’s been a boondoggle for as long as I can remember, and it’s not getting any cheaper…
JB – the nickel and copper would require a concentrator because it just wouldn’t be worth it to ship 2% Ni by rail 300 km to Nakina and then on to a concentrator in Sudbury (say). Plus the ore is highly reactive (exothermic?) and would rot quickly if not processed. The concentrator would have to be within 1 km of the mine and would upgrade the material to 14-22% Ni (or higher). Then it could go by rail or road. A concentrator would cost +/- about $1 billion.
The chromite on the other hand is considered direct-ship ore. It was originally purchased by Cliffs Resources of Cleveland, Ohio. They ran into financial trouble and sold their interest to Noront which is now being bought by the Australians (a good group of people). Chromite ore is measured in hundreds of dollars per tonne as opposed to Ni and Cu which are measured in dollars per pound.
The elephant in the room at the Ring of Fire is where do you put the road and railway? The First Nations want a road system that links up their communities. Some want it routed through Pickle Lake so they can travel to Thunder Bay. The mining companies want all the infrastructure to go to Nakina, the straightest route to the mining infrastructure in Sudbury, Sault Ste. Marie or Timmins. It is possible the chromite could head south to Nakina and west to Thunder Bay all by rail. From there it enters the Great Lakes. Same for the Ni and Cu but then they bypass the Canadian smelters and refineries (kind of like shipping Alberta crude oil to Texas).
In 2010 I predicted the Ring of Fire would not be mined in 25 years. No one took that bet. The average mine in Canada now takes over 15 years to get put into production.
As a side bar I note that the railway between Nakina and Thunder Bay has been torn up (another 300 km). These are the details that come out to haunt the economics when you start dotting the i’s and crossing the t’s.
I would like to add a bit of context:
This project has been discussed for over 10 years. It offered employment and had a good market back then. Yes, there are also diamonds.
Original estimates were much less. In fact there are way over budget now with the “studies”.
Harper was in favour, but Mcguinty and whats her name scratched it after pressure from Suzuki and friends.
Well, those 70 million immigrants Trudeau wants will have to live somewhere…
If it’s economically feasible to the miners, they should build the infrastructure and get half back as credits against royalties, otherwise forget it. Looking at google earth, I see a lot of what looks like shield rock (granite?). A (non-paved) resource road blasted out of granite should run around $100 to $200,000,000 / 300km depending on how much has to float over / fill-in bog and numbers and sizes of crossing structures. Add in Indian industry politics and government BS and who knows how much it would cost.
There is no granite. They call it the James Bay “Low” lands for a reason. Very wet, little rock outcrop. Lot’s of sand and gravel though. Add $1 billion for a road. That’s how I came up with $4 billion.
“Who will pay for the infrastructure once the mines have closed?”
No one, it’s not needed after the mines have closed and can be abandoned.
Tell that to the First Nations people who will want to drive on the road once it is built. Right now they are remote communities with only a winter road to Pickle Lake. Once the mine is up and running these communities will be linked not only to each other, but also to a major road system such as the Trans Canada from Nakina.
It is an interesting dilemma. Do you build a road to Pickle Lake for the First Nations and force the mining companies to ship via that route? Do you build a Pickle Lake road and a Nakina railway (expensive)? Do you run the electrification along the road or railway? How do you “pay” for the road and electricity corridors once the mines close? Do you abandon the road and leave the First Nations isolated once again? How do you service the electric corridor with an abandoned road system? These questions are not being asked.
My one and only question- which Librano is representing the first grifters?