Sudbury still vying for [Ring of Fire chromite] smelter – by Harold Carmichael (Sudbury Star – July 30, 2011)

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. hcarmichael@thesudburystar.com

Cliffs Natural Resources of Cleveland has yet to decide where it will build a smelter to process chromite concentrate from its Ring of Fire properties in northwestern Ontario.

A promotional video on the Cliffs’ website about the company’s three chromite deposits in the zone (Black Thor, Black Label and Big Daddy), entitled Value Beneath the Surface, highlights Greater Sudbury as one of the four communities where an enclosed chromite electric arc furnace facility could be built.

In the video, Cliffs says it is looking to start production with the Black Thor deposit in 2015 through an open pit operation and produce one million tonnes of chromite concentrate and 600,000 tonnes of ferrochrome annually. The three chromite deposits are described as “extensive, thick and high quality” with a potential production period of 80 years.

Cliffs also highlighted the two possible ways of accessing the Ring of Fire site — railway and highway — both of which are non-existent at the moment.

In February, Cliffs indicated in a report it was using Greater Sudbury as a “base case” for a chromite smelting facility and said the site was a “brownfield” or no longer in use piece of industrial land about 25 km from Capreol.

Sudbury Liberal MPP Rick Bartolucci said this week he wants to Cliffs set up the chromite processing facility in Ontario, his preferred site being the proposed location near Capreol.

“As a community, we are making a very, very attractive case why that mining plant should be started in Capreol,” he said.

When asked about the province’s higher hydro rates being a deterrent to Cliffs picking an Ontario site, Bartolucci said it would still make sense to build the facility in this province.

“We have put in place a very, very competitive tax structure that will see the costs offset by the incredible tax benefits the government offers,” he said.

The MPP said the Greater Sudbury Development Corporation is the lead player in the local push to land the processing plant in the Nickel Capital.
Neither Ian Wood, acting director of economic development at the city, nor Doug Nadorozny, the city’s chief administrative officer, could be reached for comment. Company officials could not be reached, either.

This week, Cliff said its second-quarter net earnings were US $408 million, or $2.92 per share, compared with $261 million, or $1.92 per share, in the same quarter last year. Analysts had been looking for earnings per share of $3.71, according to Thomson Reuters I/B/E/S.

Even though Cliffs posted a 56% increase in profits, which fell short of expectations as its expenses rose sharply. Its costs of goods sold and operating expenses ballooned by 40% over a year before, while other operating costs more than doubled to $114 million — including $18 million related to the Consolidated Thompson acquisition that closed in May.

Greater Sudbury is not alone in its pursuit of the Cliffs Natural Resources chromite processing facility. Timmins, Thunder Bay and Greenstone, the community closest to the mine site in the James Bay lowlands, are also in the hunt.

The Black Thor deposit contains an estimated 69.5 million tonnes at a grade of about 31.9% chromite. Cliffs said it’s looking at operating an open pit mine and on-site ore-processing facility to produce concentrate.

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