13th September 2013

Ontario’s Mining Albatross: Ring of Fire on life-support for years to come – by Bill Gallagher LL.B. Strategist (September 13, 2013)

posted in Ontario's Ring of Fire Mineral Discovery |

www.billgallagher.ca

The opening sentence of the latest legal ruling emanating from the James Bay lowlands says it all: “The north is not a quiet place”. That’s because throughout this 43-page ruling it’s the lawyers who are profiled in full court press in what is a tour de force of no-holds-barred resource sector litigating. They’re the sole reason the north is not a quiet place; because when the dust settles, this ruling will make the Ring of Fire quieter than a subarctic winter’s night for years to come.

To cut to the chase, Cliff’s Natural Resources has failed in its drive to force KWG Resources to accommodate its proposed all-season road (intending to run along the latter’s proposed rail line). Both proposals centered on KWGs ‘corridor’ of mining claims that likewise run along the only elevated / esker route into the Ring of Fire. What this means is that KWG Resources has 100% maintained its priority of mining claims integrity – as the only route into the Ring of Fire. Cliffs has been denied access.

As in The Rhyme of the Ancient Mariner, this ruling will now hang over the Ring of Fire like a dead albatross. The only question is who gets to have it hung around their neck; because this ruling puts all the players in the same boat in terms of project doldrums. As limericks go (with apologies to Coleridge):

Water, water every where … nor any drop to drink

Lawyers, lawyers everywhere … nor any shaft to sink.

Another reason that there’s going to be dead-silence for years to come is that once again the Province of Ontario is missing in action. Even the Mining Commissioners were perplexed that the ‘public interest’ aspects of this critically important resource access dispute did not even rate a ministerial intervention:

The tribunal is troubled by the fact that no provincial representative came forward to testify as to the provincial or public interest. (1st para pg 42)

This is just the latest litigation where Ontario has ducked its access responsibilities. For those keeping score this ruling can now be added to the: Platinex, Solid Gold, Gods Lake Narrows sagas; as all four disputes left the miners to go it alone in trying to achieve both reconciliation of commercial rights and site access (some in chaotic ‘on the ground’ First Nations situations.) It would appear that once again the Ontario Government does not appreciate which side of the bread the butter’s on. For it’s one thing to let the hapless juniors take the access hit; but it’s a different order of magnitude entirely for that to be allowed to happen to the majors – specifically at ground-zero – in the Ring of Fire.

The other notable feature of the ruling is the sequence of admonishments that the Commissioners doled as to how the case was conducted. On some pages, paragraph after paragraph comprise a litany of the Tribunal’s displeasure of the strident legal machinations seemingly in constant play:

The hearing of this matter was made unduly complicated by the actions of the parties as well as the entrenched conduct of their counsel. Rarely was a step taken by either side that did not raise some procedural issue that had to then be dealt with by this tribunal. (1st para pg 27)

The tribunal was struck by the intransigence displayed by both sides in the matter when it came time to discuss their plans … The entire hearing process, from start to finish, was affected by this behaviour. It resulted in the tribunal having to ask for information, specifically from Cliffs. … (1st para pg 37)

The tribunal is displeased that it had to ask for the information it saw as necessary for the making of an informed decision…. Both sides scrambled to gain an upper hand insofar as protecting their interests. The tribunal is being polite. (2nd para pg 37)

And on the essential priority of making a ruling in the public interest – this admonition:

Development of a mining deposit can generate wealth and benefits. Certainly there has been evidence from both sides that the chromite deposits in question are extremely valuable. But it is asking too much of this tribunal to make findings regarding the public interest without sufficiently useful, reliable, and meaningful evidence on the point. (last para pg 41)

This then is the troubling legal context whereby the Tribunal made its key ruling against Cliffs proposed road access; thereby upholding the 100% legal priority of KWG’s ‘corridor’ mining claims:

This is not a case where there is a public interest element for the tribunal to consider. What is before this tribunal is no more than a simple corporate fight and, as between those two corporations, the law is clear; the application must fail. (2nd para pg 42)

It’s the lack of the public interest aspect (ie not having a presence before the Tribunal) that’s the albatross that all the parties now have to wear – Ontario Government included! With this outcome, the Ring of Fire now heads into the deep-freeze – the last five years squandered – the next five years now left to litigation lawyers to advance private interests. As such, this ruling that commences with “The North is not a quiet place” ends thusly:

Finally, there has not been any evidence that the tribunal could rely on to find that there is indeed a public component to the application for the easement or even that the public has an interest in the actual road. (last para pg 42)

That’s the albatross now hanging over the Ring of Fire. With multi-billion dollar projects adrift in the James Bay lowlands, really, is this how Ontarians want to see their future resources managed? Unless Ontarians speak-up and hold the key politicians accountable: “The north is going to be one quiet place”!

 

 

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  1. 1 On September 13th, 2013, Doug said:

    Mr. Gallagher neglects to mention that in this province we live by the rule of law and that is the way it should be. I believe the decision was very just. That the Ring of Fire is important economically to the Province of Ontario has nothing to do with the justice in the matter. Expediency is not justice. If the Province believes the Ring is important to it economically then let the Province come forward with proposals for KWG, Cliffs et al and let those proposals be within the law. I do not see why this ruling should cause delays in developing the Ring of Fire. Now that Cliffs understands they cannot bully KWG, they should have every reason to move on and reach an agreement with KWG. If indeed the Ring is mothballed for a time, it will more likely be because Cliffs other businesses are not doing so well lately and money is scarce. Maybe Cliffs should have made an agreement with KWG a few years back when their share price was higher and their business was booming. I would bet you that they wish now they had. Perhaps the Province of Ontario could mediate, but the rule of law should prevail.

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