Noronts release of plans this morning made reference to the power requirements of the ferrochrome furnaces being a deterrent. They state that the 500 to 600 MW of power needed may not be available. This may be the case and is possibly shedding some dampening of enthusiasm. NL is planning to develope the Lower Churchill power which has the potential to produce 2800 Megawatts at a cost of $6 to 9 billion dollars. therefore the proposed furnaces need the equivalent of 20% of that capitol cost. As you may know, NL is having a problem getting a transmision corridor through Quebec and may go underwater to the island. On this news, Ontarios Energy Minister expressed regret because Ontario was looking forward to purchasing a third of that power. Obviously there is no surplus of power in Ont. unless they were hoping to displace other sources.

Without power for furnaces, who do you sell the lump ore to? the existing producers already have a surplus without the extra transport costs and the tarriffs that protectionist countries have been putting in place. We have a great chromite resource but it needs a North American ferrochrome operation in order to be competitive. I attended a CIM conference recently and actually spoke to a Cliffs exec who was presenting. He brought up another problem. Most of the steel production growth in NA is in electric arc furnaces using scrap steel because of the abundance of scrap. Traditional blast furnace operations using iron ore pellets is decreasing, as you can see in their quarterly reports that show Cliffs NA sales dropping dramatically. So, the NA market is small and getting smaller. This means competing overseas, which is a challenge. Do you really think that the current chromite producers that have hundreds of billions of dollars invested in infrastructure let a NA upstart develope a deposit that has enough chromite to decimate chromite prices forever without a fight.? I don't think so.

So, I would say there is an existing producer or a consortium of producers looking at this resource to detirmine how they can protect their interests and possibly improve their own profitability. It will be an interesting winter.