Ring of Fire – A Mine Project That Will Transform the Far North – Ian Ross

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. This article was published in the December, 2010 issue.

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

Two years ago, the Ring of Fire was a hot high-grade chromite discovery resigned to the back pages of the business section.

It had a quirky name inspired by the crescent shape of the mining claims laid down in the swamps of the James Bay lowlands and a Noront Resource’s mining executive’s affinity for all things Johnny Cash.

Then along came a deep-pocketed miner called Cliffs Natural Resources. The Ohio-based international iron ore and coal company has a keen interest in breaking into the stainless steel business and has blue sky ambitions for Ontario’s Far North.

The socio-economic impact for the region, especially for impoverished First Nation
people, will be simply transformational for generations to come.

What has been found, in the muskeg is the stuff of top-secret, high-level boardroom discussions and plenty of chatter in the communities that stand to benefit from a potential $2-billion mine, processing and railroad project.

The mineral potential at McFaulds Lake has been compared to the groundbreaking discoveries of nickel, copper and gold in the early 1900s that opened up the North and forever changed Ontario’s economy. It’s considered a top priority by the McGuinty government. But Queen’s Park has sent out mixed messages that have both delighted and angered Northerners with a throne speech commitment to fully develop the Ring, but also to save half of it for conservation with the controversial passage of the Far North Act.

Garry Clark, executive director of the Ontario Prospectors Association, said the uncertainty created by declaring some areas off-limits to exploration is sure to affect investor confidence.

“We don’t know what’s there. The science hasn’t been done to map that out,” said Clark. “You put in these protected areas and it’s like putting up a big wall that you can’t go around.”

That will affect the cost of building mine and rail infrastructure to service the Ring of Fire. The socio-economic impact for the region, especially for impoverished First Nation people, will be simply transformational for generations to come. It will open up access to remote communities and offer as many as 5,000 mining-related jobs.

To solidify their hold at McFaulds Lake, Cliffs acquired Freewest Resources last summer and is sketching out an $800-million mine project for their Black Label, Black Thor and Big Daddy deposits.

With that will be the construction of a concentrator and electric arc furnace, North America’s first chromite operation and its only ferrochrome production facility. Ferrochrome is a key ingredient in making stainless steel.

The question up here of Cliffs plans to locate those processing facilities has many communities rolling out the red carpet. While exploration drilling continues, Steve Baisden, Cliffs’ director of investor relations, said the miner is being “very deliberate and methodical” in sizing up the economics of a mine and railway project.

Cliffs is holding firm on a 2015 production start, but Baisden said there are many milestones to pass in securing First Nations’ agreements, finalizing a rail corridor, obtain provincial environmental and mine permits, and picking a location for the furnaces.

What’s critical is the construction of a 350-kilometre railroad connecting the deposits to the Canadian National Railway (CN) main line in northwestern Ontario. Baisden said talks have already started with CN on the transportation costs for various delivery points of the concentrate.

“I don’t know in what province we would eventually build the furnace but we’re enthusiastic about being in that part of the world because it does have access to reliable, and somewhat, economical hydro power.”

Northern Development, Mines and Forestry Minister Michael Gravelle is adamant Ontario will derive “the greatest value-added opportunity” from the Ring “which includes our commitment to see the processing facility set up in the province of Ontario.”

Through their discussions with the key mining players, the companies have made a short-list of communities that may be suitable to host their facilities.

“There are six communities being looked at by the companies,” said Gravelle. “That’s been encouraging to me. There was a period of time when there was the suggestion that there was not any possibility that the processing would happen in Ontario. That has changed.

“There is a recognition by the companies that this a real priority of our government and I think on that basis we’re having some positive discussions.”

Receiving the blessing of First Nations and defining their involvement and benefits are also vital to the project. Cliffs began that process last summer by inviting Northern chiefs to their Cleveland headquarters for introductory talks to kickstart more formal discussions.

With some Aboriginal communities experiencing chaotic social conditions, Baisden acknowledged Cliffs must be hands-on in helping to educate and train its future workforce. To advance those relations, they’ve hired former CEO of Five Nations Energy Joe Gaboury as its director of Aboriginal Affairs.

“We’re entering this in a spirit of collaboration with the province and we realize if this mining district is to become developed and producing, it will bring socioeconomic benefits to that part of the world and will be a force of good for First Nation communities and Ontario,” said Baisden.

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