Railway infrastructure, and not an all-season road, is the best option for Ring of Fire development a recently released study concludes.
KWG Resources Inc. released the study, conducted by international engineering firm Tetra Tech WEI Inc., Thursday that compared the capital and operating costs of a railroad and an all-weather into the massive chromite deposited in the lower James Bay area.
The estimated cost for a roadway is $1.05 billion compared to the $1.561 billion for a railroad. While the initial cost of railway infrastructure may be greater than that of an all-season road, the study suggests rail services come with long term savings because of shipping costs.
If 5 million tonnes per year are shipped it’s estimated that operating costs per tonne would be reduced to $6.33 for the railroad and $69.28 for trucking. Noront Resources Ltd. Chief Operating Officer Paul Semple heard about the study but hadn’t had a chance to look it over before tbnewswatch.com contacted him Thursday afternoon.
While he agreed the long-term savings of a rail line would be greater than an all-season road, Semple said the big question is by how much.
“If there was a rail line in and someone else believes there’s a business case we would gladly use it,” Semple said.
The province is looking at the proposed north-to-south road proposed by Cliffs Natural Resources into the Ring of Fire. If the environmental assessment is approved, Noront will have access to that road, albeit for a price.
Noront is also proposing an east-to-west all-season route that would run from Pickle Lake to the Ring of Fire area.
Semple believes a road is a better option for them since the company is looking at developing a mining camp and not just a single mine.
“Our first project is Eagles Nest,” he said.
“We’re not talking about shipping of three million tons of concentrate. We’re talking about 150,000 tons. We saw the evolution of the camp like every other camp in Northwestern Ontario it would start with roads. As other developments come to fruition, maybe on a larger scale then you would probably justify a rail line at some point in time. We just didn’t think it was necessarily today.”