Research is being conducted at a Sudbury facility to develop a new, less expensive method of processing chromite ore from the Ring of Fire and turning it into ferrochrome.

KWG Resources Ltd. has filed a patent application while work is being done to commercialize a method of using natural gas, rather than an electric arc furnace, to power a ferrochrome processing plant.

Moe Lavigne, vice-president of exploration and development for KWG, said his company is aiming to reduce the cost of producing ferrochrome from the chromite it will mine from the Black Horse deposit it has an 80% share in in the Ring of Fire.

If you factored in current electricity prices, two to three times higher in Ontario than some provinces, electric arc furnaces and road transportation, "there's a very strong chance ... the Ring of Fire won't be economical at all," said Lavigne.

Cliffs Natural Resources hopes to develop its Ring of Fire Black Thor deposit and ship some of its material to a smelter it plans to construct in Capreol.

To compete and make inroads in the industrial metals market, companies mining in the Ring of Fire will have to "offer something that's cheaper, better," Lavigne said.

That's why his company, working with two metallurgy consultants, hired XPS Consulting & Testwork Services in Falconbridge to do the research to develop the natural gas processing method and get around Ontario's high hydro rates.

Formerly Xstrata Process Support until it was purchased by Glencore, XPS is a licensed metallurgical engineering, technology services and test work company. It offers services such as process mineralogy, extractive metallurgy, process control, materials technology and plant support.

The two consultants whom KWG is working with are excited at the results XPS has produced so far, said Lavigne.

Natural gas furnaces are used in many locations to produce iron ore from iron oxide. Chromite is a chrome iron oxide, which isn't much different, said Lavigne.

Electricity or gas is used to burn off oxygen and what's left is a residue of metal. "It's that simple," he said.

It's already done in the iron business with natural gas, with methods pioneered in South Africa, but it hasn't been done in the chromite business despite the fact South Africa is one of the world's largest chromite producers. That's because there is no natural gas there, he said.

Lavigne said XPS has done sufficient laboratory-based test work to develop the natural gas method and prove it works, although it's still in the early stages.

Next, researchers will ramp up test work to a larger scale and refine techniques, then ramp up even further to almost a commercial scale.

But that will require a large amount of material -- as much as 1,000 tons of chromite. "Try to get a thousand tonnes out of the Ring of Fire today," said Lavigne.

So far the work has been done to 10 million to 20 million tonnes of core sample.

One of the things that will slow down testing of the natural gas processing method is the dispute over how ore should be transported out of the Ring of Fire. KWG wants to develop a rail line to move ore and Cliffs Natural Resources, which has the Black Thor deposit and has said it will build the $1.8-billion ferrochrome processing plant in Capreol, with an electric arc furnace, wants to build a road.

A big advantage of using natural gas to process ore is that it costs about the same in all provinces, unlike electricity.

"So now Ontario is on equal footing with all the other provinces," said Lavigne.

There are concerns companies with stakes in the Ring of Fire will choose to process their ore out of province because it is less expensive.

carol.mulligan@sunmedia.ca

Ring of Fire

Is located in the James Bay Lowlands, about 500 kilometres northeast of Thunder Bay

Is about 5,120 kilometres in size

Three biggest companies with stakes are Ohio-based Cliffs Natural Resources, Toronto-based KWG Resources Inc. and Toronto-based Noront Resources Ltd.

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Ring of Fire

Is located in the James Bay Lowlands, about 500 kilometres northeast of Thunder Bay

Is about 5,120 kilometres in size

Three biggest companies with stakes are Ohio-based Cliffs Natural Resources, Toronto-based KWG Resources Inc. and Toronto-based Noront Resources Ltd.