By Mary Katherine Keown, Carol Mulligan, QMIAgency

Wednesday, November 20, 2013 10:01:38 EST PM

A plan to open a chromite mine in northwestern Ontario and ship the ore to a Capreol plant for processing has been put on hold, along with hundreds of new jobs the development would have created.

On Tuesday, Cliffs Natural Resources announced it will suspend indefinitely its activities in the Ring of Fire by the end of the fourth quarter of 2013.

“As we’ve assessed the current challenges in the region and the costs to continue on the current path, we decided to suspend the chromite project indefinitely,” Bill Boor, senior VP of strategy and business development, said in a release. “Unfortunately, we will reduce the project team staffing, and close our Thunder Bay and Toronto offices, as well as the exploration camp site.”

Cliffs has determined "it will not allocate additional capital for the project given the uncertain timeline and risks associated with the development of necessary infrastructure to bring this project online," according to its statement.

In June, the company suspended environmental assessments and in October, it announced it was planning to appeal a decision by the Mining and Lands Commissioner, who had dismissed its application to build an all-weather road through land staked by Montreal-based KWG Resources Inc.

Cliff’s mine in the so-called Ring of Fire would have created hundreds of jobs in northwestern Ontario and as many as 500 in Capreol.

The announcement was greeted with a mixture of disappointment and criticism, but also hope development of the Ring of Fire will eventually get back on track.

"We must not panic and remember the Ring of Fire holds one of the richest chromite deposits in the world, as well as many other valuable minerals, $60 billion and counting," said Stan Sudol, a Toronto-based mining analyst. "That high value will definitely attract larger companies who will see the enormous benefits of mining a strategic mineral like chromite, which is critical for industrial and military uses."

Sudol said the mining sector is experiencing a global slowdown, which could have played a role in Cliffs' decision.

"Many other companies are delaying or suspending very good projects, and even if there were no delays, Cliffs would have significant financial challenges in developing the project at the present time," he argued.

Michael Gravelle, the minister of Northern Development and Mines, said the Liberal government remains committed to developing the Ring of Fire, which he called “a multi-generational economic opportunity.”

“While I am disappointed with Cliffs’ decision, and certainly appreciate the company’s continued interest in the project, our commitment is clear. The province is prepared to invest in vital infrastructure and create the right climate to support development in the region. We will work with key partners to realize these shared benefits.”

Critics, however, took turns blaming the federal or provincial governments, or both, for Cliff’s decision.

The news about Cliffs didn’t surprise Nickel Belt New Democrat MPP France Gelinas who toured the site of the company’s proposed ferrochrome processing near Capreol on Friday.

A Cliffs official showed Gelinas, Nickel Belt MP Claude Gravelle and Sudbury MP Glenn Thibeault around the former Moose Mountain Mine site, and told the politicians about the obstacles in the way of moving the project forward.

There were four major issues that needed to be settled, all involving the province, said Gelinas.

One was access to electricity, specifically an industrial hydro rate. Another was a resolution regarding the transportation corridor to move chromite ore out of the Ring of Fire.

Cliffs was looking for the province to sign off on its environmental assessment plan, said Gelinas, and agree to what it wanted Cliffs to submit. “The province hasn’t even given them that information,” she said.

Cliffs was also looking for a way to come to an agreement with First Nations in the area.

The Cliffs executive was truthful when he toured the politicians, and Gelinas said she was impressed with what she saw.

He told them, “Here’s the potential, here’s how you create wealth, here’s how you grow your economy, here’s what it means to Ontario, and I must say they convinced me,” said Gelinas.

Gravelle said the news from Cliffs on Wednesday was a setback, but he said it’s far from the end of the story for the Ring of Fire.

“There are mining companies there. There are others interested. The wealth under the ground is known.”

Part of the problem was the failure of Ottawa and Queen’s Park to work together, said Gravelle.

"The blue in Ottawa and the red in Ontario couldn't deliver by putting Northern Ontario first," he said. "Ontario was in the driver's seat and tonight we are in the ditch."

Mayor Marianne Matichuk said she is "very, very disappointed" by the announcement, but said it was a business decision based on time and financial resources. Noting that "too much time has elapsed," Matichuk argued stakeholders need to come to the table and co-operate "to get this back on track as soon as possible."

"We need to ramp up to warp speed and get it done," she added.

Norm Miller, MPP for Parry Sound-Muskoka and the PC critic for Northern Development and Mines, blamed the Liberals, while downplaying weak global markets.

"That's pretty normal in the mining business - things go up and down - and that's all the more reason why the government needed to act faster to make things happen," he said. "They did a lot of talking, but haven't made much progress on the ground. It's unfortunate, when you know all the jobs that could come from that development."

sud.editorial@sunmedia.ca

http://www.thesudburystar.com/2013/11/20/cliffs-suspends-plans-for-chromite-mine-plant

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Sensible_one

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  spud22.0 . Sensible_one

  • an hour ago • 4 0

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  Pretty much. This kind of corporate pressure is a form of blackmail to try and get the public uproar working for them. Theory is to wait it out until governments change hands or they are forced to deal. Personally I would rather see it hold off indefinitely or till KWG buys them out.

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