Cliffs Natural Resources announced on November 20, that its affiliate, Cliffs Chromite Ontario Inc., is suspending indefinitely its Chromite project in the Ring of Fire region of northern Ontario. The company will not allocate additional capital for the project because of the uncertain timeline and risks associated with the development of necessary infrastructure to bring the project online. In June of this year, Cliffs suspended environmental assessment activities at the project because of issues impeding the progress of the project.
To date, Cliffs has spent about $500 million on the Chromite project, and total investment to complete the project has been estimated at $3.3 billion.
“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,” said Bill Boor, Cliffs’ senior vice president, strategy and business development. “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 at Cliffs.”
Technical project work, including feasibility study, development and exploration activities, is being halted, and Cliffs has no planned restart date. The company will continue its work with the provincial government, First Nation communities, and others to explore potential solutions related to the critical issue of infrastructure for the Ring of Fire region. The company is supportive of the province’s intention to form a development corporation for the financing and development of infrastructure and intends to participate in future discussions.
Cliffs has outlined a base case for development of the Black Thor chromite deposit that would begin with chromite mining and end at a ferrochrome production facility. The mine would produce 6,000 to 12,000 metric tons (mt) per day of ore and 65,000 mt/d of waste rock. A concentrator and an associated load-out facility would be located at the mine site.
The ferrochrome production facility would be located in Sudbury. An integrated transportation system, including a permanent, all-season road linking all project elements to existing Ontario rail infrastructure, is a key element of the project. However, in September of this year, the Mining and Lands Commission of Ontario ruled against Cliffs’ proposed road because it would cross claims of KWG Resources.
While Cliffs’ current suspension of its Chromite Project can be viewed as a major setback for minerals development in the Ring of Fire region, other interested parties are expressing determination to keep such development alive.
On November 20, Michael Gravelle, Ontario’s minister of Northern Development and Mines, issued a statement saying, “Our government is committed to smart, sustainable, and collaborative development in the Ring of Fire, and this development is about more than one company. 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.
“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.”
Also on November 20, Noront Resources reaffirmed its plans for development of its Eagle’s Nest nickel-copper-platinum group metals mine in the Ring of Fire region. “Noront’s schedule is based on the Eagle’s Nest project being the first mine developed in the Ring of Fire,” Noront’s president and CEO, Alan Coutts, said. “Our projections have not been dependent on the development plans of other mining companies.
“We look forward to participating in the proposed development corporation with the First Nations and the provincial and federal governments to advance infrastructure planning for the region. As we near completion of our environmental assessment process, clarity regarding the timing and financing of this infrastructure will become paramount.”
