Aboriginal Owned Junior Miner in holding pattern – by 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 column was published in the April 2011 issue.

Bending Lake Iron examines site options for processing plant

An Aboriginally-owned mining company still has Atikokan in its sights for an iron ore processing plant despite delays in accessing a former open pit mine.

In mid-February, Bending Lake Iron Group president Henry Wetelainen was hopeful of signing a memorandum of understanding with the Ministry of Natural Resources (MNR) toward advancing their merchant pig iron project in northwestern Ontario.

He was expecting the agreement to be signed by Jan. 31, but nothing has happened yet when contacted in February.

The Thunder Bay company wants to mine iron ore near Ignace and process it into pig iron at the abandoned Steep Rock open pit mine near Atikokan.

“I think it’s going to be a very complex issue and it’s going to take a lot of time,” said Wetelainen.

Last August, the Ministry of Natural Resources announced that Bending Lake’s business proposal had been accepted, but is subject to several conditions toward rehabilitating the former iron ore mine, which closed in 1979.

The company has a large banded iron ore formation with the potential of 400 million tons, and probably much more, as they continue to drill off their property on Highway 622, southwest of Ignace.

In their scenario, ore would mined and crushed ore at Bending Lake, then transported in a slurry form down an a 80-kilometre long pipeline to the former Steep Rock site for processing.

The entire project, valued at almost $900 million, could create 700 construction jobs over a two-year period and 330 permanent jobs. The operation would use special iron-making technology imported from Japan that would make a high quality nugget of 97 per cent iron.

The 5,200-hectare Steep Rock site has nearby rail, road, power and natural gas pipeline connections. Trouble is, there are many environmental and water quality issues associated with the series of water-filled pits due to acid mine drainage from the old mining process.

Before mining commenced in 1944, Steep Rock Lake was drained and the area’s watershed was reconfigured with a network of dams and diversion tunnels. The MNR has been maintaining those structures and intends to keep that responsibility.

Taking in account his project financing timelines, Wetelainen said with the MNR likely to order a full-blown environmental assessment, expected to last two years, he’s been exploring “other options” which include putting the iron production machinery closer to Ignace.

The company is close to initiating a scoping study, or a preliminary economic assessment, at Bending Lake to see if a tailings dam can operate there.

“My mine manager prefers the Atikokan site,” said Wetelainen. “The big issue is do we go to Atikokan? That’s the question. It makes a lot of sense to utilize the brownfield site. What we’re going to do there is going to be tremendous.”

If the project goes off, it could be a boon for area First Nations.

Wetelainen, whose prospecting and Aboriginal roots go back to his family at Bending Lake, is collaborating with Confederation College in running prospector training courses. The 15-week course is a combination of class and field work. Some graduates are already working for him in the field and at his Thunder Bay office.

www.bendinglakeiron.com

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