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Tuesday, April 26, 2016

Ontario Northland, China and the Ring of Fire?

Edit 27 April: I received a message from Ontario Northland, explaining that the video was "supposed to be on private mode for internal view only" and it has since been deleted. The promotional video can still be found on KWG Resources' Youtube channel.

As the saga of the Ring of Fire continues, Chinese companies have taken a growing interest in the project. China is already one of the largest consumers of primary resources in the world and demand is expected to grow in the future. As a result, the Chinese government and enterprises are seeking new sources for the raw materials needed to fuel their economy.

This past month, a delegation from China Railway First Survey and Design Institute (FSDI) visited the development being undertaken by KWG Resources in the Ring of Fire. While the economic potential of the vast deposits of chromite was a key draw, the main reason for the visit was to allow a team of Chinese railway engineers to survey the possible routes for a rail link connecting the Ring of Fire with CN's main line.

After the delegation met with KWG, it held an introductory meeting with Ontario Northland before proceeding to Montreal for talks with CN. While nothing has been said regarding the meeting, Ontario Northland has since posted a translated promotional video for FSDI [edit 27 April: the video has since been removed] and has retweeted KWG's photo of the survey.

Screenshot of Ontario Northland''s Vimeo channel [Edit 27 April: video now removed]

FSDI is part of China's growing interest in railway construction. This includes such controversial projects as the Qinghai-Tibet railway, which human rights groups have claimed increases Chinese influence in the occupied territory. (FSDI is directly involved with the Tibet project). In 2006, a shareholder's proposal calling on Bombardier to adopt a robust human rights policy in light of their involvement with the project was defeated.

Other Chinese railway companies have been heavily involved in railway construction in Africa, including the ambitious East Africa railway project and the already-completed TAZARA Railway. The latter was the subject of a BBC documentary which demonstrated the lack of transparency in the project.

It is too soon to tell whether China will play a key role in the Ring of Fire, but recent developments have suggested that stakeholders are taking the possibility seriously. This leads to several important questions. To what extent would the Chinese government be directly involved in the Ring of Fire and its rail operations if FSDI or another company were to play a leading role in the project? How would China's human rights record play out with aboriginal communities, which make up the largest population in the Ring of Fire? If the BBC documentary on the TAZARA Railway is anything to by, how much transparency can be expected in a project which will likely receive funding from all levels of government in Canada?

The uncertainty surrounding the Ring of Fire and, by extension, the future of Ontario Northland has taken another interesting turn.

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