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Ring of Fire production slated for 2015

March 1, 2012
by Norm Tollinsky
In: News with 0 Comments

Two major mine developments in Ontario’s remote James Bay Lowlands will result in spending of as much as $4 billion between now and 2016.

Both Cliffs Natural Resources and Noront Resources are undergoing environmental assessmentsand working toward feasibility studies.Cliffs is proposing to spend upwards of $3 billion to develop its 100 per cent-owned Black Thor chromite deposit in anticipation of a production startup by 2015. A project description filed by the company in May of last year envisions two open pits, a concentrator, a 30 MW diesel power generating station and accommodations for up to 500 workers at the mine site itself.

The project description also proposes the construction of an all-weather road to a transload facility adjacent to the CN transcontinental rail line at Nakina, 350 kilometres to the south.

Cliffs is forecasting annual production of one million tons of chromite ore concentrate for direct shipment to export markets and 600,000 tons of ferrochrome.

The current inferred mineral resource estimate indicates a mine life of 30 years, including 10 to 15 years of production from the open pits and an additional 10 to 15 years from underground operations.

Sudbury has been selected as “a technically viable” site for a $1.8 billion ferrochrome processing facility, but Cliffs is still considering other options in Ontario and neighbouring provinces.

Eagle’s Nest

Meanwhile, Noront Resources is anticipating completion of a feasibility study for its Eagle’s Nest nickel-copper-PGE project by the end of March and hopes to be in production by 2016.

A pre-feasibility study conducted last year estimates proven and probable reserves of 11.1 million tonnes averaging 1.68% nickel, 0.87% copper, 0.89 g/t platinum and 3.09 g/t palladium. Noront estimates initial capital investment of $734 million.

The project description forecasts an annual throughput rate of one million tonnes and proposes an underground mill and 100-kilometre submerged slurry pipeline, which would convey 150,000 tonnes of concentrate per year to a filtering and drying plant at Webequie Junction, 20 kilometres south of the First Nation community of Webequie. The concentrate would then be trucked via a new all-season road to Pickle Lake and, from there, to the CN rail line at Savant Lake.

Noront also proposes to build a diesel generating station at Webequie Junction and a power line to the mine along the same route as the submerged pipeline. A winter road from Webequie Junction to the mine would be used to transport heavy equipment and supplies, while people and perishable goods would be flown in.

The orebody would be mined via ramp access.

All of these plans, of course, are subject to an environmental assessment.

The transportation corridor is one of the most contentious issues and will have to factor in the impact on the environment, as well as what’s best for the development of the Ring of Fire’s vast mineral wealth.

“The province has signalled that it’s interested in some form of public-private partnership for infrastructure development,” said Christine Kaszycki, associate deputy minister for the Ring of Fire Secretariat. “The shape of that relationship hasn’t been determined, but there is an interest in ensuring that we’re planning not just for these two mine developments, but for the longer term.”

An all-season transportation link to the Cliffs mine site makes sense given the volume of material to be shipped out. Cliffs estimates 50 to 100 truckloads a day with each truck carrying 70 tonnes of concentrate. The capital cost for an integrated transportation system, including an all-weather road, would be $600 million, says Cliffs, but the company expects part of that to be picked up by other mining companies and governments.

Junior miner KWG Resources has added to the range of options by proposing a $2 billion First Nation-owned rail line from Nakina to the Ring of Fire. KWG, which has a 30 per cent stake in Big Daddy, another chromite deposit along the same trend as Black Thor, wants Cliffs, its 70 per cent partner, to develop Big Daddy first.

Floating the prospect of a First Nation-owned rail line is one way the junior miner hopes to leverage the support it needs to stay in the game.

Cliffs, in its project description, acknowledges that a rail line is an option, but concludes that it is “not economically viable at this time.”

Processing facility

The location of the $1.8 billion ferrochrome processing facility is also hotly contested with Sudbury, Thunder Bay, Timmins and the municipality of Greenstone all vying for the prize. While Cliffs ferrochrome president Bill Boor identified Sudbury as “a technically feasible site” last year, he also warned that “at current provincial power rates, there isn’t a location in Ontario that is economically viable.”

Neighbouring provinces, namely Quebec and Manitoba, are also being considered, but Ontario is confident that a deal will be worked out.

“Our discussions to date have focused on ensuring that we’re clearly identifying the advantages that Ontario has to offer,” said Kaszycki. “To that end, we’ve had discussions around our competitive taxation environment, our labour force and our other competitive advantages, and ensuring that Cliffs is fully apprised of and factoring appropriately all of the current electricity incentives and cost reduction programs in effect.”


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