TORONTO (miningweekly.com) – US miner Cliffs Natural Resources late on Wednesday announced that it would suspend indefinitely its $3.3-billion Black Thor chromite project, located in Northern Ontario’s mineral-rich Ring of Fire district, by the end of the fourth quarter.

New York- and Paris-listed Cliffs said it had determined that it would not allocate more capital for the project given the uncertain timeline and risks associated with the developing necessary infrastructure to bring this project on line.

“While I am disappointed with Cliffs' decision, and certainly appreciate the company's continued interest in the project, our commitment is clear. The province is prepared to invest in vital infrastructure and create the right climate to support development in the region. We will work with key partners to realise these shared benefits,” Northern Development and Mines Minister Michael Gravelle said.

In June, Cliffs suspended the environmental assessment activities owing to pending issues impeding the progress of the project.

Cliffs had also become embroiled in a legal battle for access to mining claims held by exploration junior KWG Resources in the Ring of Fire, over which the only viable access route to the chromite deposits could be constructed.

While KWG proposed a rail route connecting at Exton to transport chromite to export markets, Cliffs proposes an all-weather road south towards Capreol, in the Sudbury area, where it had proposed to build a chromite beneficiation facility.

Cliffs said it would reduce the project team staffing and close the Thunder Bay and Toronto office, as well as the exploration camp site.

"We continue to believe in the value of the mineral deposits and the potential of the Ring of Fire region for Northern Ontario. As we've assessed the current challenges in the region and the costs to continue on the current path, we decided to suspend the chromite project indefinitely," Cliffs senior VP for strategy and business development Bill Boor said.

“We understand this is a hardship for our employees and their families. During this transition, we will be working with this talented team of professionals to explore other opportunities at Cliffs."

The company said that the technical project work, including feasibility study, development and exploration activities, was being halted and there was no restart date planned.

While Cliffs would continue to work with the Ontario government, First Nation communities and other interested parties to explore potential solutions related to the critical issue of infrastructure for the Ring of Fire region, the environmental assessment activities would remain suspended.

The company underlined its support of the province's intention to form a development corporation structure for infrastructure financing and development and said it intended to take part in future discussions.

WORK CONTINUES

Gravelle said that government was committed to smart, sustainable, and collaborative development in the Ring of Fire and this development was about more than one company.

The Ring of Fire, located in the McFaulds Lake area of the James Bay lowlands, located 540 km north-east of Thunder Bay, has attracted much attention over the past couple of years, with exploration drills turning for minerals, including chrome, nickel, copper and platinum-group metals.

It includes the largest deposit of chromite ever discovered in North America, which is a critical ingredient used to create stainless steel.

Gravelle labelled the Ring of Fire as a multigenerational economic opportunity for the province with known mineral potential worth $60-billion, which represented one of the largest known deposits in the world.

The Ring of Fire also presents an unprecedented opportunity for job creation with long-term benefits for communities in the North and the entire province.

He said there was no question that this was a significant project, which required all partners, including the private sector, First Nations, the federal government and the province - all of which had a stake and a role to play - to come to the table.

“Our role is clear. We will work in the best interest of Ontarians and that means we need to get it right.”

Earlier this month, the Northern Development and Mines Ministry brought partners together through a development corporation to drive infrastructure in the region forward. Premier Kathleen Wynne had written to Prime Minister Stephen Harper, seeking a role for the federal government to partner with Ontario, through the development corporation, to develop critical infrastructure investments for the region.

“We are continuing our historic community-driven process with Chiefs of the Matawa tribal council to address regional considerations. We continue to make key investments to ensure full participation by all communities in the economic benefits. This work is necessary to realise the full potential of this region and this work will continue to ensure the opportunity is realised for the benefit of all,” Gravelle said.