In the far-north muskeg of Ontario lies a chromite deposit that could potentially rival that of world No 1 producer South Africa, heralding the development of North America’s first significant chromite mine, a new era of prosperity for the region’s First Nations and millions in tax revenue for Canada’s capital province for many decades to come.
Discovered almost by accident in 2002 by diamond major DeBeers, which at the time was looking for diamonds, but instead found copper and zinc, the 5 000 km2 Ring of Fire deposit, which is about 1 000 km north-west of Toronto, is one of the most promising mineral development opportunities in Ontario in almost a century.
Tucked deep into northern Ontario, the Ring of Fire contains rich mineral deposits that could transform the region much as the oil sands have transformed Alberta. Named whimsically for a Johnny Cash song, the crescent-shaped arc of deposits has the potential to make Canada the world’s fourth largest chromite producer.
Only four countries account for about 80% of the world’s chromite production, with South Africa leading Kazakhstan, Turkey and India.
China’s resource-hungry economy buys half the world’s supply and the US buys about 15%. Chromite, when processed into an alloy, is used in the production of stainless steel, among other products and is valued for its ability to increase steel’s hardness, toughness and resistance to corrosion. In thin chrome-plated coatings, it protects auto parts, appliances and an array of other products, including weapons.
But, since DeBeers’ initial discoveries, a flurry of exploration efforts have been undertaken, and one after the other, mineral finds were announced, including copper, platinum-group metals, gold, chromite and nickel.
The Ontario provincial government is also eager to develop the chromite and nickel finds Ontario Assistant Deputy Minister for Ring of Fire coordination Dr Christine Kaszycki told Mining Weekly. She said the area at this time has an expected value of about C$60-billion in minerals and its development would be a boon to all.
And there exists surfeit potential for a multitude of other colossal resources still to be discovered in the area, Toronto-based junior Noront president and CEO Wesley Hanson said.
“With the amount of discoveries made in the Ring of Fire in such a relatively short period, I am certain there are more resources in the area, waiting to be defined,” he said in a recent interview.
As coordinator, Kaszycki’s role is to work with other provincial ministries, the federal government, local communities including First Nations communities, the mining industry and other stakeholders to facilitate the orderly development of the Ring of Fire’s massive potential.
The provincial government last year appointed Kaszycki to a new Ring of Fire Secretariat to help move the various mining and related infrastructure projects forward.
“This is not just about building mines or roads. The entire province will feel the positive economic impact, especially the north with its mining consulting and equipment industries, as well as its supply and service sectors. We have to get it right, especially for the Aboriginal communities to ensure they have the tools to fully participate in the development,” she said in a recent interview with Mining Weekly.
The Assistant Minister said the opportunity exists to develop the resource from the outset in a way that fosters environmental sustainability. She pointed to the correct legislation being in place to ensure a balance is struck between the commercial development of the Ring of Fire and positive social benefits for the First Nations that inhabit the area.
To this end the Far North Act of 2010 was developed, which for the first time in the province’s history provides a legislative foundation for First Nations and Ontario to work together on community-based land-use planning in the Far North. The Far North Act placed into law the requirement for First Nations’ approval of land-use plans on public land.
Ontario Mining Association president Chris Hodgson told Mining Weekly that with the secretariat, the government has the right structure to get everyone on board and proceed in a timely fashion. “They understand the importance of this opportunity.”
He said government’s approach to enable the First Nations to decide on land-use rights, by implementing a number of environmental monitors in the area and its commitment to develop infrastructure in this remote part of Ontario would help to add credibility to the development of the Ring of Fire.
“Mining is an expanding component of the Ontario economy. The world wants Ontario’s mineral products and if the province provides necessary infrastructure support and maintains an atmosphere conducive to investment, it will continue to be pulled ahead by a strong mining industry,” he said.
There are two significant first movers within the Ring of Fire area, and a third company with a minority interest in a chromite project.
US diversified miner Cliffs Natural Resources of Cleveland, Ohio, is proposing the development of a significant chromite mine in the Ring of Fire. In May, Cliffs announced a C$3.3-billion investment to build the mine, a processing facility, a transportation corridor and a smelter in the Sudbury area.
The miner is moving fast and hopes to have all the permits and environmental assessment approvals for the proposed mine by the end of 2013.
Cliffs sees its Black Thor chromite deposit it purchased for $240-million in 2010, as an opportunity to supply about 10% of the global chromite market. The giant openpit mine is expected to produce about 600 000 t of ferrochrome for consumption in the North American and European steel markets each year, as well as ship about a million tons of chromite concentrate into Asia.
The company expects to create about 1 200 direct jobs through the project.
Noront, which also holds significant chromite resources in the area and is credited with the discovery of the rich chromite resource, plans to develop a nickel, copper and platinum mine at its McFaulds Lake deposit.
In August 2007, this remote area yielded one of the highest-grade discovery holes in Canadian history, heralding the discovery of the Eagle's Nest nickel, copper, platinum and palladium deposit.
Since that initial discovery, Noront has invested more than $150-million, defining a viable reserve at Eagle’s Nest, a significant chromite resource at Blackbird, additional nickel sulphide mineralisation at Eagle Two and AT-12 and vanadium mineralisation at Thunderbird.
The company in September completed a feasibility study for the Eagle’s Nest project, which placed a net present value of $500-million on the project.
Noront proposes to invest C$609-million to construct an 11-year nickel/copper and platinum-group metals mine with on-site processing. To reduce the environmental impact, the company is proposing an underground mine, mill and tailings storage facility. Hanson said the idea is to “build a mine you can walk over and not even know is there” and would comprise one of the most modern mines in the world.
The company hopes to start production in 2016/17.
While Noront also has substantial chromite holdings, mining this resource is to come later. A Chinese steel producer earlier this year bought 10% of the company, a clear sign of the global interest in the region’s mineral wealth.
But, the most significant challenge for any of the 30 000 claim holders in the remote and inhospitable Ring of Fire is overcoming the logistical nightmare of moving equipment into the area and moving minerals out.
TSX-V-listed KWG Resources holds a 30% interest in the Big Daddy chromite deposit located near Cliffs’ proposed Black Thor chromite mine, also located in the McFaulds Lake area. Its fully owned subsidiary Canada Chrome has staked claims and conducted a $15-million surveying and soil testing programme for the engineering and construction of a railroad to the Ring of Fire from Nakina, where the Trans Canada line of the Canadian National Railway can be connected.
In August, Canada Chrome said it is pushing ahead with its proposed 300 km railway and has applied to Ontario’s Ministry of Natural Resources for 32 aggregate permits on sites located along a string of claims that could form the bed of its proposed railway. The line would link potential Ring of Fire mine sites with the main CN line near Nakina.
Canada Chrome has filed applications with the Ministry of Natural Resources for thirty-two aggregate permits at sites that are located within the mineral claims covering the company's 308 km-long railroad right-of-way to the site it has tentatively named ‘Port of Koper Lake’ at the north end of its proposed railway. The company said the application covers two 16-unit claim blocks which include the western shore of Koper Lake where mining companies are using temporary float-plane docking facilities.
KWR and Canada Chrome said their preliminary plans would see the development of a permanent amphibious aerodrome at the location together with an adjacent and permanent east-west all-weather runway and heliport terminal in addition to a railroad terminal, fuel storage compound, communications hub, accommodation services, and repair and maintenance facilities.
However, all eyes remain on Cliffs, which is currently undertaking a feasibility study for its Black Thor chromite project, to see what infrastructure would realise from discussions with the provincial authorities. The company in May said that its discussions with the Ontario government have resulted in an agreement-in-principle for key elements of its chromite project, including government-backed development of provincial infrastructure.
Canada Chrome’s mining claims are currently at the centre of a dispute before Ontario’s Mining and Lands Commissioner (MLC), who has been asked to determine if Cliffs can proceed with a Public Lands Act application for surface rights.
Cliffs wants to build an all-weather road on the strip of claims to service its proposed Black Thor mine/mill complex, while Canada Chrome has refused to give its consent, owing to being in favour of a railway, which trigged the hearing.
Cliffs’ all-weather road proposal has also received severe resistance from some local First Nations.
In an order on August 24, the MLC dismissed an application from Neskantaga First Nation to be granted standing as a party to the hearing. Neskantaga, which is strongly opposed to Cliff’s planned road, was looking to have the MLC hearing put on hold until larger constitutional questions around Ring of Fire development could be resolved.
Meanwhile, in what it calls a ‘New Deal for northern Ontario’, a group led by the James Bay Lowlands Ports and Trustee has proposed an ambitious, publically-owned transportation corridor that would tie the Ring of Fire to existing northern Ontario railway lines while taking over control of the Crown-owned Ontario Northern Transportation Company and continuing passenger rail services from James Bay to the south.
Helping stakeholders sort through competing infrastructure transportation proposals – which route and whether it should be an all-weather road or rail line – is one of the many issues Ring of Fire coordinator Kaszycki is attempting to resolve and the cost for such a solution could total as much as $2-billion.
“Not only will environmental and Aboriginal agreements be front and centre, but decisions will need to be made in the coming years as to what provision of basic infrastructure is provided by governments, in conjunction with the mining companies, to facilitate the development of the resources in a way that is sustainable and provides maximum benefit to all involved parties,” University of Toronto policy and economic analysis programme research associate Steve Murphy said.
Cliffs and Noront are currently undergoing a coordinated environmental assessment under the Canadian Environmental Assessment Act and the Ontario Environmental Assessment Act.
Cliffs said before it could make a final decision on the project in its entirety, it must receive provincial and federal environmental assessment approvals, negotiate mutually acceptable agreements with affected First Nations communities, work with governments to address the lack of infrastructure in the Ring of Fire and complete its commercial and technical feasibility studies.
However, nonprofit nature conservation organisation Ontario Nature has weighed in on development of the Ring of Fire, saying that mines have an enormous impact on the natural environment, especially when infrastructure needs to be constructed to support the mining operations.
Canada in April unveiled a plan to streamline the review process for significant economic projects, such as pipelines and mines, in a bid to compete with other resource-rich countries. Natural Resources Minister Joe Oliver said demand from emerging economies in Asia and around the world provided the potential to create even more jobs and growth in Canada.
Canada’s Treasury Board president Tony Clement recently said that the new plan for the country’s regulatory system is expected to strengthen environmental safeguards, including tanker and pipeline safety.
The plan calls for a move toward a “one project, one review” system for reviews of significant projects by recognising provincial processes as substitutes or equivalents to federal ones, as long as they meet the requirements under the Canadian Environmental Assessment Act.
But while industry groups supported Oliver’s announcement, Ottawa’s resource development plan did not gain the same support from environmentalists.
Ontario Nature is pleading with the government of Ontario and the federal government of Canada to conduct a strategic environmental assessment of the entire Ring of Fire area to determine what the impact of piecemeal development will be on the environment and the affected communities.