The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
Cliffs Natural Resources announced Wednesday it plans to appeal the Sept. 10 decision by the Mining and Lands Commissioner, who dismissed its application to build a 340-km all-weather road that traversed land staked by Montreal-based KWG Resources Inc.
“The appeal raises important issues of law under the Mining Act and the interpretation of the law may have significant negative ramifications for the development of mining claims,” Cliffs wrote in a state-m ent it issued Wednesday, which marked the deadline to initiate the appellate process.
The Cleveland-based company had sought to dismiss the consent of its rival company in order to establish a transportation channel from its Black Thor deposit to the community of Greenstone.
The company deems the road “essential to the development of the Ring of Fire and a necessary component” of its chromite project, according to a Sept. 20 press release. Cliffs plans to ship the chromite to a smelter in Capreol. The smelter would create as many as 500 jobs in the Sudbury area.
In Wednesday’s statement, Cliffs added the decision was “disappointing” and threatened “the development of the Ring of Fire mining district.”
Moe Lavigne, vice-president of exploration and development at KWG Resources Inc., said his firm is not surprised Cliffs has chosen to appeal, but noted KWG is “confident” in its position. Lavigne said land access is available for a price.
The appeal will not affect his company’s plan to explore and develop its chromite deposits in the Ring of Fire. KWG has a 30% stake in the Big Daddy deposit, as well as an 80% interest in the Black Horse chromite deposit — KWG’s newest project.
“It’s a deposit we think will end up supporting the railroad,” Lavigne said. “We have 46.5 million tonnes, which makes it the second biggest deposit in the Ring of Fire. It’s also the richest deposit, with 38.8% chromium oxide.”
Preliminary metallurgical testing rendered ferrochrome with a purity as high as 62% chromium, which “makes it the highest grade ferrochrome to be produced out of the Ring of Fire that I know of,” Lavigne added.
Stan Sudol, a Toronto-based mining consultant, estimated the appeal could take a year. It will likely delay the project, but Sudol pointed out that is not necessarily a bad thing.
“The global market for chromite, like all minerals, is very depressed,” he said. “It’s a benefit right now to have the project delayed, on some level, because of the depressed market.”
Sudol noted Cliffs is experiencing financial hardships, in part because it has had trouble finding partners for its projects in the Ring of Fire. The company is also seeking a new CEO.
“Any new CEO will assess all projects on the plate, to decide which ones to keep and which ones to jettison,” Sudol said. But he was clear nothing has been confirmed — abandoning the Ring of Fire is simply one option Cliffs could consider.
Lavigne said the environmental assessment process could cause delays across the board. It is an “unstable period” for the Ring of Fire project, Sudol noted.
As the matter is before the court, Cliffs’ has not released many details related to its appeal.
For the original version of this article, click here: http://www.thesudburystar.com/2013/10/09/cliffs-to-appeal-roads-decision