Good reason for optimism around Ring of Fire progress - Point of View

By Brian MacLeod/The Sudbury Star

Posted 2 hours ago

When a mining project moves from pre-feasibility to the feasibility stage, it's

often done through a news release and follow-up interviews with the press.

It's a significant step, but not usually the whopper we saw this week when U.S. firm Cliffs Natural Resources made its announcement.

What made this one different is the size -- $3.3 billion all told -- and the announced location of a proposed $1.8-billion ferrochrome smelter in Sudbury to process material from the Ring of Fire chromite deposit in northwestern Ontario.

As well, Cliffs officials indicated they had come to an understanding with the province on the cost of power.

And so we saw press conferences in Sudbury, Thunder Bay and Cleveland on Wednesday.

While people in Greater Sudbury were happy, the Liberals took a beating elsewhere.

In Thunder Bay, Mayor Keith Hobbs slammed Ontario Natural Resources Minister Michael Gravelle, whose riding is Thunder Bay- Superior North, refusing to shake his hand, saying "it was like coming to a funeral" on the way to the press conference. Several First Nations lamented a lack of consultation, the NDP wants all or most of the material mined in the Ring of Fire processed in Ontario, and Progressive Conservative mines critic Norm Miller issued a statement saying, "I'm not convinced that the mining landscape in the North is any different today than it was yesterday."

Some perspective is helpful.

The difference between a pre-feasibility study and the feasibility stage -- common terminology in the mining industry --is that the latter includes more technical engineering and better cost projections that are used to identify the necessary level of investment.

The 5,000 sq-km Ring of Fire is going to be extensively developed. But before plans for mining and processing can come to fruition, they must clear federal and provincial environmental assessments, agreements must be negotiated with several First Nations, a deal with governments on infrastructure (including a $600-million all-weather road) must be worked out and Cliffs must complete its own detailed technical studies.

And First Nations are challenging the environmental assessment in court, asking for a more detailed and open-ended process.

The company wants to get digging in 2013, but that's optimistic.

So yes, there's a long way to go, which shouldn't surprise anyone in Sudbury. But that's never stopped companies from building mines, smelters and refineries here.

Some 35 mining companies hold 30,000 claims in the Ring of Fire. Cliffs is one of them. Out of Cliffs' open pit mines (over the next 15 to 20 years) and processing facilities will come about 1,200 jobs. The ferrochrome smelter will see account for 450 of those. The rest will go to northwestern Ontario, where people in Thunder Bay and First Nations will see the benefits.

Cliffs plans to mine about 2.2 million tonnes of ore per year, 1.2 million of which will be sent to the proposed smelter to be built north of Capreol for processing. The rest may well go out of the country in the form of concentrate.

Smelters use enormous amounts of power, and given that Ontario is one of the most expensive jurisdictions on the continent for power, Cliffs President Joseph Carrabba's comment that "we think we've struck the appropriate deal" on power costs is vital.

There is good reason to believe this project will go ahead within a reasonable time frame, that hundreds of jobs will be available here and in northwestern Ontario and that even more development is on the horizon, given that along with a host of other metals found in the Ring of Fire, graphite is now emerging as a surprising bright light.

There are a lot of hurdles to clear, yes, but contrary to Miller's statement, the mining landscape has indeed change