Australian Economy

Australian owner of major Ring of Fire deposits brings big promises, controversial reputation

The Australian owner of the company that now holds the largest mining stake in the Ring of Fire in northwestern Ontario has a controversial reputation stemming from business dealings with Indigenous people in his homeland.

Andrew Forrest, a billionaire mining mogul and philanthropist, owns Wyloo Metals. In April, Wyloo took over Noront Resources’ stake in the Ring of Fire region in a $600-million deal that took the previously publicly traded Noront private. 

The deal came as the province seeks to mine the region’s rich mineral deposits as part of its $3.5-billion critical minerals strategy amid a boom in electric vehicle (EV) battery production.

The region holds key nickel, copper, platinum and palladium deposits in the James Bay lowlands, about 500 kilometres from Thunder Bay. 

First Nations in the region remain divided over if and how development should happen. 

Legal experts previously told CBC News that concerns of some First Nations about matters such as the impact of development on the environment are not being heard. 

Forrest earlier founded Fortescue Metals Group (FMG) and built it into one of Australia’s top three iron ore producers.

Wyloo Metals owner’s record

Over its nearly year-long bid to purchase Noront Resources, Wyloo repeatedly touted Forrest’s credentials at FMG, saying in one news release he “intends to replicate his success at Fortescue with Noront’s Ring of Fire assets.”

His supporters say his success includes championing Indigenous employment, training and entrepreneurship. 

But some in Australia say Fortescue’s record with Indigenous people includes a patronizing, divisive, dismissive and even bullying approach to communal land rights. 

“I want to keep an open mind and hope that any company coming into northern Ontario is going to approach it in a good way … but there’s reason in that history to worry,” said Dayna Scott, an associate professor at Osgoode Hall Law School and in the faculty of environmental studies at York University in Toronto.

“In the past, it doesn’t seem as if meaningful consent from Indigenous Peoples was part of [Forrest’s] strategy in order to profit from mining,” said Scott, also York Research Chair in Environmental Law and Justice in the Green Economy.

In Australia, as in Canada, Indigenous people have traditionally lacked the power to halt natural resource development on their territories. 

Australia only began recognizing Native Title after a landmark 1992 court decision forced its hand. Since then, Indigenous groups have been applying to the Federal Court to have their title recognized. If successful, a corporate body is assigned or established to manage that title for the community. 

Mining companies are required to negotiate with Native Title-holding corporations or claimants before proceeding with development. But if talks fail to produce a deal, the National Native Title Tribunal can, and usually does, agree to issue a mining lease anyway, said Ciaran O’Faircheallaigh a public policy professor at Griffith University in Brisbane, Australia, who works as a negotiator for First Nations.

An autonomous truck readies to pick up a load of iron ore at Australia’s Fortescue Metals Group (FMG) Chichester Hub in Western Australia. Though the company has hired at least 1,000 Indigenous people, it has a controversial history in its land-rights negotiations. (Melanie Burton/Reuters )

“So Aboriginal traditional owners are under a lot of pressure to do a deal,” said O’Faircheallaigh.

The royalty agreements Fortescue typically offers Indigenous groups are often “outrageously low” compared to competitors BHP and Rio Tinto, he said. 

“The agreements that I saw for their initial mines required people to give Fortescue Metals Group the right to do anything they wanted on the whole of a group’s claim area.” 

Divisive tactics alleged

One group that negotiated with Fortescue in the late 2000s said the company divided their community, whose negotiators refused the mining company’s offers. 

The Yindjibarndi Aboriginal Corporation, which represents the Yindjibarndi people of Western Australia, rejected several deals from Fortescue, including one worth $4 million AUD annually (about $3.6 million Cdn), to set up the Solomon mine on land the Yindjibarndi had a claim to. 

Australian author and analyst Paul Cleary calculated the offer at just 0.04 per cent of the value of the resources at 2011 prices.

Michael Woodley, chief executive officer of the Yindjibarndi Aboriginal Corporation, told CBC News Fortescue’s negotiators were “arrogant,” and told them “the reason we’d give you $1.5 million, or whatever it was, is because you don’t know how to manage money. … The key to your success is more working for FMG … and then having these business opportunities.”

The Yindjibarndi reminded Fortescue of the value of their connection to the land and told them they’d be worse off if they accepted the deal, Woodley said.

Michael Woodley, CEO of the Yindjibarndi Aboriginal Corporation, says Fortescue’s conduct divided his community. (Submitted by Michael Woodley)

But Fortescue established the mine anyway, he said, and fought in court against its claim for exclusive possession of its land — a type of Native Title that recognizes Indigenous rights to control access.

It paid no royalties to the Yindjibarndi Aboriginal Corporation in trust for the community, he added, but gave business contracts to a breakaway group of Yindjibarndi that supported Fortescue’s deal.

In 2015, the Federal Court of Australia found Fortescue had clandestinely helped to fund and organize an attempt by the breakaway group to oust the leadership of the Yindjibarndi Aboriginal Corporation as the Native Title holder for the community, replace it with members of their own group and adopt a legal position favourable to Fortescue. 

“I mean, it’s kind of like the stuff that the CIA might do when it’s trying to undermine a government,” said Cleary, whose book, Title Fight, is about the Yindjibarndi’s battle with Fortescue. 

The Yindjibarndi won their exclusive possession case in 2017. In 2020, the High Court of Australia refused to hear Fortescue’s appeal, paving the way for a compensation claim against the company.

In 2019, the Australian Broadcasting Corporation quoted Forrest as suggesting during a shareholders’ meeting that compensation for the Yindjibarndi amounted to “mining welfare.”

Fortescue comments on Indigenous goals

CBC News requested an interview with Forrest, but a spokesperson said his schedule would not permit it. Fortescue instead sent statements via email outlining its relationship with Indigenous Peoples in Australia. 

“Fortescue was founded on the belief that the communities in which we operate should benefit from our success,” the statement said. 

But one community that signed an agreement with Fortescue in 2009 told an Australian parliamentary committee in 2020 that it was unsatisfied with the company’s approach to protecting heritage sites.

“[Fortescue Metals Group] comply with our agreement when it suits them,” said Joselyn Hicks, a director of the Wintawari Guruma Aboriginal Corporation, the Native Title holder for the Eastern Guruma people.

“FMG has been withholding our royalty payments, an amount of $1.9 million [AUD], since February 2020 because we have simply asked for information about their plans for some mining leases they have applied for. These mining lease areas contain numerous sacred sites.”

Fortescue informed Wintawari that it would only pay the royalties when it signed off on the mining leases, Hicks said.

The Ring of Fire in northwestern Ontario is in one of the most carbon-rich peatlands in the world, and is known as the ‘breathing lands’ to nearby First Nations. (Josef MacLeod)

In written submissions to the parliamentary committee, the corporation described Fortescue’s approach to Australia’s process for protecting Indigenous cultural heritage as “bullying, dismissive, disrespectful and inconsistent with their published values and the expected behaviours of an ASX Top Ten Company.”

When asked by CBC News how First Nations could trust Wyloo to respect important sites, a spokesperson for Fortescue said in a statement, “Fortescue has worked closely and transparently with Native Title partners to protect and avoid almost 6,000 heritage places with a primary objective of avoidance of heritage places of cultural significance.”

Fortescue also provided statements citing its history of support for Indigenous employment and entrepreneurship, saying it is one of Australia’s largest employers of Indigenous people, who account for 1,000 employees.

It had awarded $3.5 billion AUD (nearly $3.2 billion Cdn) in contracts and subcontracts to Indigenous businesses and joint venture partners over 10 years through its Billion Dollar Opportunities program, the spokesperson said.

Wyloo promises to award $100 million in contracts to Indigenous businesses as part of its Ring of Fire operations and to open a training centre that guarantees jobs to Indigenous people upon completion of training. 

Support for training, entrepreneurship

An Indigenous entrepreneur who served on the Native Title working group for another community that signed a deal with Fortescue in Australia believes the company has largely lived up to the promises it made to the Palyku to deliver opportunities.

Tammy O’Connor, who grew up in Marble Bar in Western Australia, is founder of the King Kira Group and operator of PTK Environmental Services, which has contracts with Fortescue. 

Until Forrest approached them in the mid-2000s, she said, mining companies had paid little attention to the Indigenous population in the area.

“He spoke about giving us all this opportunity — he used the term, ‘giving us the fishing line, but not catching the fish for us,’ kind of thing.” 

Tammy O’Connor is founder of the King Kira Group and operator of PTK Environmental Services, which has contracts with Fortescue Metals.  (King Kira Group)

She started a company in 2014, inspired by seeing other Indigenous businesses launch with the help of Fortescue’s Billion Dollar Opportunities program, she said; Fortescue helped connect her with another business that developed a joint venture with her and trained her for opportunities in the environmental field.

O’Connor said she was also able to acquire assets for her company through Fortescue’s $50-million ANZ initiative, which allows eligible businesses to access financing through one of Australia’s largest banks at a competitive rate.

“Before Fortescue came along, none of our people really owned houses, or cars or had nice stuff.” 

That has changed since the company moved in and started employing people, she added.

First Nations prosperity a goal, chief says

Chief Bruce Achneepineskum of Marten Falls, an Anishinaabe First Nation in northern Ontario that’s a proponent of a road project to the Ring of Fire, told CBC he wants to see prosperity in his own community.

“It’s important for our local economies in the communities,” he said in March after his preliminary meetings with Wyloo. “I see a lot of unemployed First Nations youth in our communities with the future looking bleak … And that’s one way to reach reconciliation, economic reconciliation.”

Achneepineskum was just learning about Wyloo in March and had not spoken to First Nations in Australia, he said. But he was “very pleased” with what he heard from the company about its commitment to environmental sustainability and working fairly with Indigenous people.

“I think they should be given their own chance to explain and prove their own track record, instead of hearing it from other sources like other media outlets.”

Marten Falls Chief Bruce Achneepineskum says his initial conversations with Wyloo left him feeling optimistic about their commitment to the environment and treating First Nations fairly. (Jody Porter/CBC)

But Chief Wayne Moonias of Neskantaga First Nation, one of four First Nations that have declared a moratorium on development in the region until a number of conditions are met, said he’s heard “bits and pieces” about Fortescue’s treatment of Indigenous people in Australia and has concerns about it.

“If the company is going to … just move forward with development without the consent of our people, that’s going to be an issue,” he said, adding his only contact with Wyloo was at a group meeting of Matawa chiefs in March. 

“Our people still use the river system. They use the lands for their way of life. And there has to be a way to make sure that our people are the ones that determine what’s going to happen, and that’s not happening right now.”

The spokesperson for Wyloo told CBC News the company “is committed to a long and collaborative partnership with the region’s Indigenous communities,” adding, “We respect these relationships and are committed to listening carefully to these communities, and learning from them to fully understand their perspective as it relates to developing the critical minerals we need to transition to a cleaner economy.”

Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.