Cliffs announces "suspension" of Ring of Fire chromite mine development with no restart date planned
From CBC.ca
Ring of Fire delay highlights need for mining infrastructure
Ontario needs to 'show the world that we are open for business,' mining professional says
CBC News Posted: Nov 22, 2013 8:58 AM ET Last Updated: Nov 22, 2013 3:00 PM ET
Cliffs Natural Resoures Black Thor chromite mine project was set in the Ring of Fire region in northern Ontario. The company has officially pulled out of the project. (CBC)
Reaction from rival company in Ring of Fire on Cliffs 8:42 Cliff suspends Ring of Fire project 2:59
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Cliffs Natural Resources' decision to suspend operations in the Ring of Fire has sent waves through the mining sector. Some players say it sends a bad message about Ontario, but others believe it could provide the impetus to develop infrastructure.
The head of the Prospectors and Developers Association of Canada said he hopes Cliffs' decision will spur action on developing infrastructure.
Barb Courte-Elinesky, the owner of North Star Drilling in Thunder Bay, says the largest player in the Ring of Fire freezing its project puts Ontario in a poor light. (North Star Drilling)
"It's up to everyone to come together, and that includes the government, the industry, and First Nations to look at what are the challenges ahead," Glenn Nolan said.
"But what are the opportunities for participating in this opportunity, and do we want to see delays?"
Cliffs' announcement was not what Barb Courte-Elinesky wanted to hear.
The owner of Northstar Drilling in Thunder Bay and director with the group Women in Mining said the largest player in the Ring of Fire freezing its project puts Ontario in a poor light.
"We need to show the world that we are open for business," she said.
Glenn Nolan, the head of the Prospectors and Developers Association of Canada, says Cliffs Natural Resources decision to pull out of its Ring of Fire project is "a wake-up call for the government to look at what they can do to help the industry in supporting the development of infrastructure. " (Noront Resources)
"When something like this happens, it's not good for our economy, but also it sends out a message."
Nolan, who is also a vice president with Noront Resources, said Cliffs' announcement wasn't a complete surprise, based on statements Cliffs had made in the past.
Noront and KWG Resources have both re-affirmed that it's business-as-usual for their operations in the Ring of Fire.
"It's a challenging time for the mining industry," Nolan said.
"It's a wake-up call for the government to look at what they can do to help the industry in supporting the development of infrastructure. I think with the development of infrastructure into the far north, [it] also benefits the local First Nation communities."
'A more thorough analysis'
The head of the Ontario Prospectors Association said Cliffs' decision is just the latest move in what he calls a "poker game" the company is playing with the province.
"I think Cliffs just played a card and now it's up to the government to ... respond to it," Garry Clark said. "Most of the things have ... been lining up, though not as quickly as ... Cliffs wanted."
Clark noted the suspension could do some damage to Ontario's image, but said the province remains one of the better jurisdictions for mining in more accessible areas.
Stainless steel markets 'are flat'
The editor-in-chief of The Northern Miner said Cliffs would have only added five per cent to the world's chromite supply and the company was off in its predictions of ferrochrome prices.
"Stainless steel markets are flat and you have ... slightly increased production from China," John Cumming said.
"And you have the other main producers [such as] ... South Africa, India, Brazil ... [and] Kazakstan. So the market is well supplied with chromite. So there's this issue [of] ... who needs the supply and then ... the actual price."
Cumming said it's still worthwhile to do some more exploration in the area, but people shouldn't expect a mine to be built anytime soon.
A 'gift of more time'
The odds of Cliffs coming back to the Ring of Fire "are probably less than great," said mining industry writer Stan Sudol - but it is also dependent on what happens in global metal markets.
Mining industry writer Stan Sudol said he thinks the interruption in the Ring of Fire's development presents an opportunity. (Supplied)
The interruption in development presents an opportunity, he noted.
"We've been given a gift of more time," Sudol said. "So let's take a look at this project in a more thorough analysis on how to benefit the northwestern region. And so that's a win."
Sudol said the delay will give the province more time to build infrastructure and agreements with First Nations.
However Sudol pointed out the critical factor is the lack of infrastructure in the area. Until that issue is resolved, he said it will keep a lot of major mining companies away.
But once the infrastructure is in place, and revenue sharing agreements have been made with First Nations, then "I think this project could be brought back to life fairly rapidly," Sudol said.
The chromite deposit is so rich, "there will be a lot of major mining companies in the world who will look at this as a great opportunity to develop."
"Even though, right now, a lot of people are concerned or saddened that Cliffs has pulled out ... the minerals are [still] in the ground, and they're not going to rot."
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Cliffs Natural Resources calls off Ring of Fire mining project
RACHELLE YOUNGLAI
Published Nov. 20 2013
Cliffs Natural Resources Inc. announced on Wednesday that it would stop developing the Ring of Fire mineral deposit in Northern Ontario, dealing a blow to the provincial government's plans to tap the resource-rich area and grow the local economy.
The Ring of Fire deposit of chromite, nickel, copper, zinc and gold is located about 500 kilometres north of Thunder Bay and has an estimated value of between $30-billion and $50-billion.
But a slump in commodity prices, along with difficult negotiations between the Ontario government and the nine First Nations governments that surround the deposit, have delayed development for months.
"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," Cliffs said in a statement late on Wednesday. "There is no restart date planned."
The Cleveland-based company already suspended its environmental assessment because it was waiting for the province and the First Nations to reach an agreement on how to develop the deposit, most of which is not accessible by road.
The company said it will stop work by the end of the year and close its offices in Thunder Bay and Toronto as well as its exploration camp site.
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Cliffs bailing out
Nov 20 - By Jamie Smith and Leith Dunick
FILE PHOTO// Cliffs' Jason Aagenes.Photo by: tbnewsatch.com file photo
One of the Ring of Fire's biggest players is suspending its project.
Cliffs Natural Resources Inc., in a release issued Wednesday night, said it plans to halt development of its Northern Ontario chromite project by year's end.
"We continue to believe in the value of the mineral deposits and the potential of the Ring of Fire region for Northern Ontario," said Bill Bloor, a senior vice-president with the Cleveland-based company.
"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.
"Unfortunately, we will reduce the project team staffing and close our Thunder Bay and Toronto offices, as well as the exploration camp site. We understand this is a hardship for our employees and their families. During this transition, we will be working with this talented team of professionals to explore other opportunities."
Earlier this year the province's lands and mining commissioner quashed Cliffs plans to build a north-south road to the mine site, instead siding with KWG, which staked the corridor and plans to build a rail line instead.
Minister of Northern Development and Mines Michael Gravelle, in a release issued late Wednesday evening, said while he's disappointed with Cliffs' decision, the province is still prepared to go ahead with Ring of Fire infrastructure development.
In the past the company blamed stalled negotiations on the province and First Nations. This past summer they also indefinitely suspended their environmental assessment process.
Gravelle also said the Ring of Fire isn't just about a single company or a single mine.
"Our government is committed to smart, sustainable, and collaborative development in the Ring of Fire and this development is about more than one company," he said. "It is a multi-generational economic opportunity for this province with known mineral potential worth $60 billion and represents one of the largest known deposits in the world.
"The Ring of Fire also presents an unprecedented opportunity for job creation with long-term benefits for communities in the North and the entire province. 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."
Gravelle added a project of this magnitude has a number of stakeholders, including the private sector, First Nations and the federal and provincial governments, and all have a role to play in seeing the multi-billion project move forward.
"Our role is clear. We will work in the best interest of Ontarians and that means we need to get it right," Gravelle said.
The opposition NDP were quick to jump on the Liberals, blaming government mismanagment for threatening to extinguish the Ring of Fire.
"The decision by Cliffs Resources to halt operations in Northern Ontario demonstrates how the provincial government has no plan to develop and grow the mining sector," said MPP Michael Mantha, the party's Northern Development and Mines critic.
"For years now all players from industry to First Nations to municipalities have spoken out on the need for a strategy on infrastructure, electricity prices, resource sharing and employment opportunities, yet the Liberals have dropped the ball."
Mantha added the too-little-too-late effort of the governing Liberals could cost the province billions in potential economic development.
Cliffs still plans to work with the Ontario and First Nations communities to explore potential solutions and supports a recent development corporation announced by the province. Technical project work, including a feasibility study, developmet and exploration activites are being stopped, with no restart date planned.
The company did not say how many jobs will be lost by their decision.