Northern Ontario’s First Nations Voice: http://wawataynews.ca/
Cliffs Natural Resources is considering delaying the expected start date of construction on its Ring of Fire chromite mine until 2017 or beyond.
Joseph Carrabba, Cliffs CEO and President, told international investors on Oct. 25 that in light of current global iron ore prices the company is reviewing the timeline for its proposed northern Ontario mine.
“This includes delaying the major capital spending outlays and could push the production target date beyond 2017,” Carrabba said. “We still expect to complete the feasibility stage of development and environmental assessment by next year. However, we have decided to shelve our early works plans until feasibility is complete.”
Carrabba said that Cliffs plans to decrease spending on exploration of its chromite site in 2013 as well as cancelling plans for capital spending at the site for the upcoming year. “Exploration will go down in 2013, just like everything. The first thing that always goes is exploration and R&D from any mining company that goes with it,” Carrabba said.
Carrabba also told investors that the company is exploring the option “to take on a partner for the project.”
While Cliffs announced in May 2012 that it plans to proceed with its $3.3 billion project involving a Ring of Fire chromite mine, a road connecting the mine site to Highway 11 and a processing plant in Sudbury, with an expected construction start date in 2015, the company has lately been hit hard by falling global iron ore prices.
As of Nov. 1 Cliffs stock price was hovering around $37 per share, well below its six-month high of over $60 per share in May 2012.
“Being a commodity company, our share price is definitely closely correlated to the products we sell, which (are) iron ore and coal,” Cliffs spokeswoman Pat Persico told Cains Cleveland Business in September. “But we do continue to believe that the fundamentals supporting Cliffs’ long-term strategy are intact and anything affecting pricing is not for the long term.”
At that time the company announced it was pushing back planning to start construction on the chromite mine from 2015 to 2016.
First Nations in the Ring of Fire region have long argued that development of the Ring of Fire was moving too fast. Both Chief Cornelius Wabasse of Webequie and Eli Moonias of Marten Falls told Wawatay earlier this year that their communities are not ready to fully benefit from the proposed mines, and that a delay would help them get ready.
“It’s moving too quickly,” Wabasse said. “It’s a pressure for us, as we’re not prepared yet. We need time to prepare our people.”
“I’d like to have time before everything starts so that we’re satisfied that we’re taking the right direction, so we’re not jumping to conclusions here,” Moonias said. “With Cliffs’ sschedule, I wont have any time to explore this thing further.”
The full transcript of Carrabba’s speech to investors can be found at http://seekingalpha.com