Doubling down?

KWG Resources could double its chromite holdings in the Ring of Fire by Christmas, says an officials with that company.

With Cliffs Natural Resources looking to sell its two companies in the proposed development, and with those the holdings for millions of tons of chromite, KWG vice-president of exploration and development Moe Levine said the two companies started talks weeks ago about KWG becoming the buyer.

"Since then KWG has been organizing the financing to be able to complete this transaction," Levine said.
Levine couldn't discuss any numbers on a potential sale.

"You don't know until the deal's closed," he said.

There are plenty of people out there who would like access to untapped chromite. Since the news that Cliffs was looking to sell, Levine said it's brought a lot of potential investors out of the woodwork.

"I think it's entirely possible that we will be able to finance this development on our own with partners," Levine said.

If KWG were successful, Levine said it could speed up the development process as one company now has the lion's share of chromite. Disputes over road versus rail and the path to get there, which KWG and Cliffs took each other to court and the Ontario mining and lands commissioner over, go away.

"Which will really facilitate the development. A lot of the conflicts around that will disappear," he said.

KWG thinks it could succeed where Cliffs failed because the company's goal is to become one of the cheapest producers of chromite in the world. From rail to building as much infrastructure as possible out of the mining area itself, in Nakina for example, KWG wants to produce at such a cost that commodity prices don't really impact the project.

"To ensure you survive the ups and downs," he said.

"That's our objective and I think it's doable."

But there's still plenty of uncertainty. Levine said Cliffs, KWG and Noront all need outside investment to make the Ring of Fire a reality.

Provincial discussions with First Nations, the actual implementation of the development corporation and a long-term infrastructure plan need to be addressed and at a faster pace.

"The biggest hurdle that we have to finance any project is the vacuum that exists in the Ring of Fire," Levine said.