TORONTO (miningweekly.com) – Ontario’s Northern Development and Mines Minister Michael Gravelle on Friday announced that the Ontario Northland Transportation Commission (ONTC) would remain in public hands, but would sell the communications arm Ontera.

Ontario will continue to operate the motor coach, Polar Bear Express, rail freight and refurbishment services of the ONTC as a government-owned transportation company.

The province will make new strategic investments to ensure ONTC's transportation services and infrastructure continue to support economic growth in north-eastern Ontario. The investments include more than $23-million over three years, subject to yearly budget approvals, to buy new motor coaches for its bus line and to refurbish rail coaches for the Polar Bear Express that runs between Cochrane and Moosonee, near the shores of Hudson Bay.

“This will maintain and improve vital transportation services, and provide new work for the ONTC refurbishment division,” Gravelle said.

ONTC provides freight transportation to industries in north-eastern Ontario and north-western Quebec along its 1 100 km rail system, which spans from Moosonee to North Bay and from Calstock to Rouyn-Noranda, Quebec.

“After two years of great uncertainty for the men and women of the ONTC, today is a good-news day for the City of North Bay. My number-one priority all along was to save jobs and bring certainty to the future of the ONTC. We welcome the $23-million investment in our buses and refurbishment shops which not only retains jobs, but builds enormous potential for future job creation here in our community.

“This announcement ensures that the ONTC, which has been headquartered here in our city for over 100 years, will remain and bring stability and confidence to our community,” said North Bay mayor Al McDonald.

The announcement was hailed by Ring of Fire-focused project proponent KWG Resources, which said that it was “very encouraged” by the provincial government’s support for the development and renewal of the capacities of the ONTC.

"Around the globe, the recurring challenge of insuring the environmental and economic sustainability of bulk commodity extraction and processing – is transportation.

“One of the unique blessings of the location of the Ring of Fire discovery in Northern Ontario is the opportunity to exploit it with the multibillion-dollar legacy infrastructure assets of the Ontario Northland Railroad (ONR). This is very substantial capital that need not be spent or amortised in fixing very long-term and large tonnage transportation costs. It is a huge competitive advantage,” KWG president Frank Smeenk said.

He noted that the ONR had lost one freight customer after another in recent years, to the point where its survival became questionable and the provincial government was mulling privatising the ONTC.

However, the discovery of the Ring of Fire's chromite deposits now held the potential to insure substantial bulk freight traffic for the railroad over many generations.

“This can revive and expand the ONR. In fact, we have suggested that the Minister consider if the ONTC Act might be amended to become the Northland Development Corporation Act. This would be consistent with the ONTC's original mandate and the Minister's expressed desire to have new infrastructure requirements met by a focused development corporation,” Smeenk said.

KWG Resources, through a subsidiary, Canada Chrome Corporation, controls the key transportation route to the Ring of Fire on land, which it acquired through claim staking in 2009.

KWG has proposed a rail route connecting to the CN transcontinental rail line at the Exton rail siding to transport ore to consumers, competing with its US-based joint venture partner Cliffs Natural Resources, which has proposed an all-weather road south connecting to the same rail line west of Exton. Cliffs’ plan is to transport chromite concentrate by rail to Capreol, in the Sudbury area, where it plans to build a ferrochrome production facility.

Ontario had also reached an agreement with Bell Aliant to buy Ontera. Proceeds from the sale include $6-million in cash and would result in long-term revenue to ONTC estimated at $10-million. The province and Bell Aliant would each commit $15.1-million as part of a $30.2-million public-private investment in telecommunications infrastructure in north-eastern Ontario.

The announcement came as a result of consultations with Aboriginal, municipal, industry and labour leaders and would provide much-needed certainty to the communities of north-eastern Ontario.

In 2012/13, 240 000 passengers used ONTC motor coach services. Ridership had been increasing over the past three years.

The Polar Bear Express carries about 64 000 passengers a year.