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Cliffs leans to Sudbury for ferrochrome refinery

Cliffs Natural Resources has selected Sudbury as “a technically feasible site” for a ferrochrome processing facility, but is looking to the province of Ontario to cut a deal on the cost of power.“At current provincial power rates, there isn’t a location in Ontario that is economically viable for Cliffs to build the furnace operation,” said Cliffs’ ferrochrome president William Boor. “The viability of an Ontario-based furnace production facility and final selection of a location is still being evaluated.”

Cliffs shared preliminary project information for its chromite project in Ontario’s Ring of Fire with the media on February 4th as a prelude to submitting a proposed project description to government in March.
Cliffs’ Black Thor property contains a current inferred mineral resource of 69.5 million tonnes at a grade of approximately 31.9 per cent chromium oxide.

“While remote and with significant infrastructure challenges, Black Thor is a world-class orebody,” said Boor. “With further exploration and the addition of two other chromite orebodies under our control, we expect this to be a multi-generational mining operation.”

The mine site, located 300 kilometres north of the province’s current road and rail network, will encompass two open pits, accommodations for up to 500 workers, a concentrator and a load-out operation. A transition to underground mining could be possible in 10 or 15 years.

Cliffs is proposing a road from the minesite to CN Rail’s transcontinental line in the municipality of Greenstone, from which point the chromite will be loaded onto rail cars and shipped out for refining. The proposed road doesn’t preclude the addition of a rail line along the same route at some point in the future, said Boor.

The company envisions a public-private partnership to cover the cost of the transportation corridor that will lead to the development of other mines in the Ring of Fire.

“The infrastructure solution for the Ring of Fire needs to be looked at from a big picture perspective to make sure that what’s arrived at is a good, long-term solution and creates as much opportunity for the region as possible,” said Boor.

Cliffs’ estimate of economic benefits from the multi-billion dollar development include the creation of 950 jobs during the construction phase of the mine and processing facilities, and up to 1,300 permanent jobs once the mine and production facilities are up and running.

A pre-feasibility study is scheduled for completion in September. The target date for the completion of a full feasibility study is late 2012. The company hopes to begin construction in 2013 and commence mining operations in 2015.

Sudbury was identified as the “base case” location for the ferrochrome processing facility because it is one of the few places in Northern Ontario that is able to supply the 300 megawatts of power required by the electric arc furnaces. The brownfield site north of Sudbury also has access to CN Rail’s transcontinental line.

However, Cliffs will also continue to evaluate other options, including locations in Manitoba and Quebec, both of which have lower power rates.

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