How China could finance a railroad into the Ring of Fire RING OF FIRE

THUNDER BAY -- China’s hunger for chromium combined with the capacity of its state-owned rail industry could be the recipe for the first route into the Ring of Fire.

A team of China Railway First Design Survey Institute engineers landed in Thunder Bay on Tuesday to survey the land between Nakina in Greenstone and the remote chromite deposit.

“I think this is a really good project. It has a lot of potential,” said China Railway FSDI vice president Zhu Lizheng.

“This mining project, in its nature, I think, has two components. One is the chromite itself. The second one is the transportation of chromite. We’re here to try to solve that problem.”

Their observations from helicopters flying over the route Wednesday and Thursday will form the basis for the feasibility study the company will conduct over the next four months. That study will determine the project’s cost and be used to leverage investment capital from Chinese banks to build the railroad.

“The biggest concern when you’re designing bridges for railroads or bridges for roads is the ice conditions,” said Moe Lavigne, vice president of KWG Resources, the company holding the mineral rights to develop the Ring of Fire.

“The flow of ice impacts the structures so the reason they needed to be here at this point in time is to be able to see the ice.”

China Railway FDSI is known for building the Qinzang Railway connecting Tibet and Qinghai provinces over a hostile, icy landscape.

As rail development within China reaches capacity, its companies are looking to international markets to continue their growth. Lavigne recalled the hinge moment when the Chinese government announced the strategic shift last fall.

“If you’re going to be selling chromium, you need to be able to attract big buyers and Chinese steel-making companies are the big buyers -- but they’ve never been interested. They’ve always kept track of what’s going on and we’ve maintained our discussion. Then in October, China announced its railroad business (would) advance globally,” he said.

“The day after the Chinese government announced that, we get a phone call.”

By January, KWG subsidiary Canada Chrome Corporation had signed a Memorandum Of Understanding with China Rail First.

The railroad would be a profitable means to an end for China’s broader economic interests. Sixty per cent of the world’s stainless steel is produced within China’s borders and the Ring of Fire is among the world’s largest untapped sources for the raw minerals needed to produce more.

“China’s very hungry for chromium,” Lavigne said.

“They’re very anxious to secure a supply of this so it appears the deal that might be had here is, they’ll finance the railroad providing we make a commitment to provide them chromium from the Ring of Fire chromite deposits.”