Far from the rolling farmland of southern Ontario sits Seth Klarman, dubbed a superstar in the investor world for his investment prowess. He presides over the Baupost Group, a $24 billion hedge fund based in Boston.
Little is known about Klarman, described as “secretive” in a February story in Fortune magazine. But residents of bucolic Melancthon, population 2,900, feel they know enough: His hedge fund wants to devour a chunk of their farmland with a quarry.
It’s not just any quarry. It’s a mega-quarry, bigger than any other such project in Canada, and it would be used to extract the limestone that lies beneath the farmland—the very thing that makes the soil verdant enough to produce much of the region’s potatoes, among other staples.
Even more striking: Much of the limestone sits below the water table, so part of the proposal of the Highland Companies, which surreptitiously bought the land under which it plans to mine, is to pump 600 million liters (160 million gallons) of water daily out of the site to keep it dry enough for working as it extracts 200 feet below the water table. The water would eventually be returned, but local residents question how it can be kept clean enough for drinking water.
What lies beneath this farmland about 70 miles north of Toronto is a billion metric tons of aggregate, which is sorely needed to build roads in the growing province. It also represents potential billions in profit for Baupost and Klarman who has zero stake in the community.
It sits at the head of five major rivers that supply drinking water to more than a million people. Highland has assured everyone that it will be environmentally responsible. But people say that with such a large-scale operation there is no way to tell, and no going back if an unintended environmental disaster were to happen.
Moreover, although the company would return about half the land back to farming, but much of the nutrient-rich honeywood loam soil that the region is known for would disappear.
The situation has drawn together a unique opposition that ranges from wealthy Torontons with weekend houses in the area to First Nations citizens. Last September, Environment Ontario said it would conduct an environmental assessment of the plan, which is above and beyond what provincial law requires. A decision on the quarry would be years away.
Highland officials say they have been transparent, but the farmers say otherwise: When the company began buying farmland in 2006, principal John Lowndes told the potential sellers that Highland was going to grow potatoes. Under this guise he spent $50 million to buy a combined 8,500 acres of land over several years. And Highland did indeed grow potatoes on it, becoming Ontario’s biggest producer.
Then the other shoe dropped. Last March Highland filed a 3,100-page application to turn 2,300 acres of that farmland into a quarry. The true agenda was revealed, much to the consternation of those who had sold the land with no inkling that it would be destroyed.
This CBC News edition of The National spells out the controversy, how it evolved and what’s in store.