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Cheap Quebec power proposed for Ring of Fire

November 28, 2014
by Norm Tollinsky
In: News

Mushkegowuk Council First Nations study rail, energy and seaport corridor to James Bay

The 270-kilometre Western James Bay Transmission Line is owned by the Five Nations Energy Inc. The 115kV line runs from Moosonee to Attawapiskat and supplies energy to De Beers’ Victor Mine.

The 270-kilometre Western James Bay Transmission Line is owned by the Five Nations Energy Inc. The 115kV line runs from Moosonee to Attawapiskat and supplies energy to De Beers’ Victor Mine.

The eight First Nation communities of the Mushkegowuk Council in Ontario’s Far North are proposing a rail, energy and seaport infrastructure corridor connecting the province’s massive Ring of Fire chromium deposits to James Bay.

The idea is still in the very earliest stage of development, and hinges on importing cheap electricity from Quebec on a First Nation-owned grid free from having to charge Ontario’s much higher regulated electricity rates.

Three of the Mushkegowuk Council’s member First Nations are already in the electrical transmission business as owners of Five Nations Energy Inc.’s 270-kilometre Western James Bay Transmission Line, which runs from Moosonee to Attawapiskat and supplies energy to De Beers’ Victor Mine.

The proposed infrastructure corridor would include a seasonal seaport on James Bay, a transmission line to the Ring of Fire and an electrified rail line.

The transmission line would also be extended to supply electricity to the isolated Matawa First Nations most immediately affected by the Ring of Fire development and currently dependent on diesel power.

The $1 billion the Ontario government has pledged for infrastructure development in the Ring of Fire could serve as a possible source of funds for Mushkegowuk’s proposed infrastructure corridor, but until now, the Mushkegowuk communities have largely been ignored by the province, noted Suzanne Leclair of Connect Counsel, an advisory firm retained by Mushkegowuk and specializing in capacity planning, co-ordination and development of infrastructure and resource related projects for First Nation communities.

Most Ontarians fail to understand that Mushkegowuk lands lie downstream of the Ring of Fire and would therefore be greatly affected by any mineral development there, said Leclair. A First Nation led infrastructure corridor proposal would go a long way toward accelerating the development of the Ring of Fire, said Leclair.

Expensive Ontario power, conflicts over transportation access and negotiations with First Nations contributed to a decision by Cliffs Natural Resources in November 2013 to put an indefinite halt to its Black Thor chromite development project, and following a proxy battle and change in leadership in September, the company announced that it was interested in selling its property.

According to Leclair, the Mushkegowuk proposal would remove a lot of the uncertainty and roadblocks surrounding Ring of Fire development and positively impact the economics of Cliffs’ divestiture. Importing cheap electricity from Quebec without having to charge Ontario regulated rates is a key part of the proposal.

“There are some regulatory exemptions we would need to look at,” acknowledged Leclair. “If you are on Ontario’s regulated grid, you pay Ontario’s regulated rates, but what if you’re not part of Ontario’s regulated grid?” she asked.

Cheap rates would be required to justify a conventional, electrically powered ferrochrome smelter in Ontario, but Mushkegowuk member communities still haven’t decided if they would be happy with the impact of heavy industry on their territory, said Leclair.

A ferrochrome smelter at one end or the other of Mushkegowuk’s proposed infrastructure corridor may be a non-starter anyway because of their isolated location, in which case further processing will go elsewhere, “but Ontario will lose those jobs no matter how you look at it given today’s regulated rates,” said Leclair.

Mushkegowuk’s proposed transmission line would still power a concentrator and other facilities in the Ring of Fire, in addition to the rail line and the isolated Matawa communities.

A competing proposal by KWG Resources for a natural gas reduction reactor in Nakina is still highly speculative, claimed Leclair.

“There are some innovative technologies that are being discussed, but they’re not yet bankable technologies, so let’s be realistic,” she said. Furthermore, a natural gas solution “is a non-starter for the (First Nation) communities that want to be positively impacted by the Ring of Fire, which brings us back to importing energy from Quebec.”

Mushkegowuk Council has presented its proposal to the Matawa chiefs and hopes to win their support for a joint Aboriginal-led infrastructure plan.

According to Leclair, Aboriginal organizations that come to the table with infrastructure solutions can determine which mining projects can benefit from investment certainty.

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