Natural Resources Committee on Feb. 14th, 2012

[The Chair, Conservative, Leon Benoit]

Mr. McGuinty, you have up to seven minutes. Go ahead, please.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Mr. Chair.

Mr. Boor, could you give us a quick snapshot? You work with Global Ferroalloys, correct? Is Cliffs Natural Resources a wholly owned subsidiary of this company?

[William Boor]

No. Cliffs Natural Resources is the parent company. Within that, in very broad terms, we have an iron ore business in metallurgical coal, and we established Global Ferroalloys with this project.

[David McGuinty, Liberal, Ottawa South, ON]

Cliffs Natural Resources is the parent company.

[William Boor]

Correct.

[David McGuinty, Liberal, Ottawa South, ON]

How big is this company?

[William Boor]

Market cap would be a good indication of that. It's between $10 billion and $11 billion of market cap.

[David McGuinty, Liberal, Ottawa South, ON]

Is it publicly traded? New York, Toronto—

[William Boor]

Yes. It is on the New York exchange, and also Euronext.

[David McGuinty, Liberal, Ottawa South, ON]

What I'm hearing from different witnesses is that you're telling us this project is effectively economic. There are some market risks, and you've said infrastructure management problems are your second big challenge, but there are market risks.

Are you telling us that because of the conduct of your company and the investments you've made thus far in your negotiations, this project is of such an order of magnitude that it's really worth jumping through the hurdles and going through the negotiation process you are going through?

[William Boor]

Yes, certainly. I would say two things. One is that we're in an early stage of the development, pre-feasibility, so if we didn't believe it was economic, we wouldn't be doing this work and making these investments. Certainly we think the process is worth it.

[David McGuinty, Liberal, Ottawa South, ON]

The global market, then, for the two products that are contemplated, chromite and ferrochrome, are pretty huge and pretty significant. Where's the growth?

[William Boor]

It is largely in Asia, when you look at it on a worldwide basis.

[David McGuinty, Liberal, Ottawa South, ON]

What are the products used for?

[William Boor]

Ultimately, any concentrate sales that we have will go into other ferrochrome furnaces, for the most part. Ferrochrome, whether it's refined in Canada on that product stream or refined elsewhere, goes into stainless steel manufacturing. It's everything from cutlery to cars and washing machines.

[David McGuinty, Liberal, Ottawa South, ON]

Understood.

I would like to turn for a second to Mr. Ferris.

Mr. Ferris, your judicial review application is pretty new. I don't think I've ever heard of a judicial review application on an EA process claiming that the government's refusal to have a joint review panel constitutes insufficient consultation and accommodation on behalf of first nations peoples. It's a pretty groundbreaking application. What's your instinct in terms of how this is going to go?

[Raymond Ferris]

We believe this is not new. There have been some cases across Canada. All we're saying is that we don't like the decision that has been made by the Canadian Environmental Assessment Agency in referring this EA to a comprehensive study review. We feel that the timelines and the whole process is not sufficient. It's very inappropriate.

We're asked to comment, in writing, three months afterward, but we have people who don't speak or write in English, let alone understand what it means. How can our people provide any comments within that time period? Allowing this process to continue and trying to have our people involved in it just doesn't make any sense at all.

[David McGuinty, Liberal, Ottawa South, ON]

Deputy Grand Chief, you didn't get to the back end of your brief, but I'm sure most members here have read it, and I want to expand a little bit. You're really calling for a new and quite creative approach to the development of this region.

You're talking about an overarching oversight mechanism at the political level. I think what you're implying is you're calling for federal, provincial, and first nations peoples to co-manage this entire project together in terms of all of the magnitude, all of the opportunities for minerals and beyond. It's a very interesting approach. You're not just calling for a joint review panel, which you support; you're talking about something larger, aren't you?

[Deputy Grand Chief Les Louttit]

Yes, we are. It's not to interfere with the negotiations that are currently happening between a first nation or groups of first nations.

However, we recognize that in the Attawapiskat-De Beers situation, De Beers effectively negotiated an IBA that would set the bar very low in terms of benefits, especially in terms of the financial benefits, and only after the fact did they negotiate with the other three first nations on the James Bay coast. We don't want to see that kind of agreement again.

We want to be able to establish some kind of a coordinating mechanism at the political level, hopefully, to engage the Ontario cabinet members and federal representatives, including first nations leadership. We know there are going to be multiple layers of individual or collective agreements; however, there are certain levels of criteria in terms of maximizing benefits that we need to promote.

[David McGuinty, Liberal, Ottawa South, ON]

Let me ask one last question, then. We've heard a lot about equity participation and equity interests in non-renewable resource exploitation in northern Canada, and in your brief you're calling for equity interest in the mining companies.

Mr. Boor, is that something your company would contemplate, beyond an impact benefit agreement?

[William Boor]

That's not our current frame of mind because of the investment we're making in this and because we're trying to make this investment viable for us.

[David McGuinty, Liberal, Ottawa South, ON]

Has your company ever entered into an equity interest arrangement with first nations peoples?

[William Boor]

Not that I know of.

[David McGuinty, Liberal, Ottawa South, ON]

Do you know anybody in the sector who has?

[William Boor]

I don't know if I've a broad enough understanding to answer credibly, but not that I know of.