There was a very good article, giving an overview of chromium production in the world and the important uses of chromium, that came out in September of 2008 by Tom Vulcan, posted on Hard Asset Investor's website (and first brought to my attention through a post by Miskealp on the Freewest board).

In this article, Vulcan made some observations that, at the time, did not mean that much to me, but since the large position (15%) recently taken by Cliffs Natural Resources in KWG Resources, has now become more significant. He said:

"When looking at ferrochromium production, it is, however, worth bearing in mind the very diplomatic words of the USGS: "The major producers of chromite and ferrochromium are politically and economically dynamic nations." Country risk is a significant issue."

The above use of the word "dynamic" is a politically correct and polite way of saying 'unstable'. Mr. Vulcan goes on to mention the two largest producers of chromite and ferrochromium, South Africa and Kazakhstan:

"The U.S. currently produces only a small amount of ferrochromium. Indeed, as a percentage of apparent consumption, in 2007, the country had a 62% net reliance on imports: predominantly from South Africa and Kazakhstan."

He then says that "the price of chromium and ferrochromium, and the cost of importing ferrochromium continue to rise." As I mentioned in my previous post, importation (especially from far away places like South Africa and Kazakhstan) is almost always going to be much more expensive than using a resource that is local, or substantially closer, especially if the resource can be accessed via railway. And the "dynamic" or "unstable" or "unreliable" nature of the political situation in countries like South Africa and Kazakhstan make a source of chromite from a nearby peaceable, friendly and stable neighbor preferable also.

(The above quotes are from the 4th page of Mr. Vulcan's article, which can be read in full at the following link: http://www.hardassetsinvestor.com/fe... )

It seems even more apparent that Cliffs is attempting to become the first FULLY INTEGRATED North American producer of all the ingredients for making high-grade alloy and stainless steels by its investment in the Ring of Fire through KWG. Through this move it seizes an opportunity to own a major interest in a colossal chromite deposit. It already is the largest producer of iron and coking coal (the other necessary ingredients for high-grade alloy and stainless steels) in North America. This info is contained near the end of the most recent press release of KWG Resources, and also on Cliffs website, in the address of their CEO, their 'Business Profile', and other locations therein. See:

http://www.cliffsnaturalresources.co...

http://www.cliffsnaturalresources.co...

I believe we will see Cliffs, in the days ahead, becoming more involved with investing in the Ring of Fire.