Cliffs Natural Resources to invest $3.3 billion to develop Ontario Ring of Fire

TORONTO – Ontario announced a $3.3-billion investment by an American mining company Wednesday to develop the Ring of Fire, a huge mineral deposit near James Bay, but faces opposition from some First Nations, local communities and environmentalists.

Cliffs Natural Resources plans to build a chromite mine, a road to the area about 500 kilometres northeast of Thunder Bay and a processing facility near Sudbury, said Northern Development and Mines Minister Rick Bartolucci.

The Ring of Fire includes the largest chromite deposit ever discovered in North America.

The $1.8-billion proposed smelter in Capreol would create about 900 jobs, including 450 when it’s in operation by 2015, and would process the chromite into a key component of stainless steel, Bartolucci said in Sudbury.

“There was stiff competition with other jurisdictions for the location of this smelter and those jurisdictions were outside the province of Ontario,” he said.

Cliffs and Ontario will need a few more months to reach a final deal and resolve outstanding issues such as electricity prices and a possible exemption to process ore outside of Canada, said Bartolucci.

“There are a number of factors that Cliffs and the province of Ontario are still discussing and still working towards resolution,” he said.

“What is important is that we’ve arrived at the stage where both Cliffs and the province of Ontario are very comfortable in our announcement that the smelter is going in Ontario.”

Cliffs issued a statement describing the developments Wednesday as moving from the pre-feasibility stage to the feasibility study phase.

“A number of additional studies, including feasibility and other milestones, need to be completed before the company begins allocating a significant portion of capital to the project’s construction,” said Cliffs’ vice-president Bill Boor.

In the legislature, the New Democrats said the processing of chromite in Ontario is key to keeping jobs in the province, and criticized Bartolucci for saying such details had not yet been hammered out with Cliffs.

“We think that’s a pretty important detail to be worked out, and thousands of good jobs rely on that detail,” said NDP Leader Andrea Horwath.

“If we’re going to build a prosperous and sustainable future we need to be smart and focus on creating those good jobs.”

The Progressive Conservatives said they were suspicious of “good news presented in vague terms,” and questioned the government’s ability to bring First Nations onside.

“It seems like there was two different announcements, and the one from the government made it sound like ore was being shipped as we speak,” said Opposition mines’ critic Norm Miller.

“Why were there no First Nations at this announcement, because that can be a major stumbling block to hitting the timelines.”

Bartolucci said First Nations must be “front and centre” as the development proceeds around the Ring of Fire, which also holds the potential for production of nickel, copper and platinum.

But one chief accused Bartolucci of trying to head off opposition to the mine and refinery “in a last ditch effort of questionable morality.”

Chief Sonny Gagnon of the Aroland First Nation said a secret meeting arranged late Tuesday between him, the chief of Marten Falls and provincial officials raised serious questions about Bartolucci’s ethics.

“Ontario thought they could divide and conquer us by holding an 11th-hour meeting and make a few promises without our fellow Matawa chiefs present,” Gagnon said in a release.

“Ontario needs to deal with First Nations first rather than simply taking orders from Cliffs.”

The Nishnawbe Aski Nation complained Cliffs and the province were “ignoring First Nations” and said that is not the way to build a relationship with them.

“I am disappointed with today’s announcement as it is obvious that Cliffs and the government of Ontario are not listening to and not respecting First Nations affected by development in the Ring of Fire,” said NAN Deputy Grand Chief Terry Waboose.

The First Nations are worried about the environmental impact of the development in such a remote and pristine area of the province.

“The Cliffs project is the canary in the coal mine of the Harper government’s rollback of environmental regulation,” said Gagnon.

The Webequie First Nation “acknowledged” Ontario’s commitment to get the federal government involved in the consultation process, and pressed for a power transmission line to bring electricity to the mine site and to communities that currently burn diesel to generate power.

Environment Minister Jim Bradley said he expected both the Ontario and federal governments would conduct environmental assessments on the Cliffs’ proposal, but wasn’t sure what impact new federal legislation would have on the project.

“I won’t take advantage of the opportunity to take a swipe at the federal government until such time as we see precisely what role they are going to play in this,” said Bradley.

“I can’t really predict whether that’s an instance flowing from their new legislation, but I know the environmental community is very concerned.”

The Canadian Parks and Wilderness Society condemned the province and Cliffs for striking “a backroom deal” for a 350-kilometre road based on the needs of a single mining company.

“The province and Cliffs have decided to build this road in a pristine part of Ontario’s far north without considering scientific concerns, irreversible impacts on fish and wildlife, and communities’ needs,” CPAWS Janet Sumner said in a statement.

“Ontario and Cliffs made a business deal prioritizing Cliffs’ bottom line over good public policy and the public interest.”

Mayor Renald Beaulier of Greenstone, the municipality closest to the Ring of Fire, questioned the decision to locate the smelter near Sudbury, and felt Wednesday’s announcement was premature.

“It’s hard to see how you can lead with a decision on a refinery location without an agreement on how you are going to obtain the ore body in the first place,” Beaulieu said in a release.

“Why was Exton not considered as the refinery site, given its proximity to the (mine) site, superior transportation linkages … and significant support from municipalities, First Nations, chambers of commerce, Metis and others?”