KWG disappointed in rail delays, reaffirms support for union’s ‘New Deal’

16th September 2013 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO ( – Chromite mining hopeful KWG Resources on Monday expressed its disappointment in the near three-year delay of a planned railway into the Ring of Fire and reaffirmed its belief that a 300 km rail track would open up the region for mining.

After staking the right-of-way claims and conducting preliminary railroad engineering design and assessment, the development of the Ring of Fire railroad concept was delayed as a result of the dispute with US iron-ore major and joint venture (JV) partner Cliffs Natural Resources, before the provincial Mining and Lands Commissioner last week dismissed Cliffs’ request to the Natural Resources Ministry for a road-access easement over KWG's claims.

"We believe the railway is in the public interest and can be used to benefit the various mines in the Ring of Fire, as well as local communities, and is a much better alternative to a private road; a higher-cost transportation option, which the government is currently considering funding," KWG president Frank Smeenk said in a statement.

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 has proposed to build a chromite beneficiation facility.

KWG holds a 30% interest in the Big Daddy chromite deposit and has the right to earn 80% of the Black Horse chromite deposit. KWG also owns subsidiary Canada Chrome, which had 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 Exton, Ontario.


KWG previously advised the Minister of Northern Development and Mines (MNDM) that it would support the business plan proposed by the ‘New Deal’ of the General Chairperson's Association (GCA) representing unionised employees at provincial transport and telecommunications agency Ontario Northland.

The plan entails that MNDM would lodge its shares in the Ontario Northland Railway (ONR) as a going concern to the James Bay & Lowlands Ports Authority, a new agency governed by the First Nations and other residents of Northern Ontario under federal oversight, which would operate on a cost-recovery basis. This could also assist the provincial government to avoid the substantial termination and closure liabilities connected with its proposed liquidation of the agency.

KWG said it would make its railroad engineering and right-of-way claims available to extend the ONR network to the Ring of Fire if the plan succeeded.

The agency would finance the new construction and continuing operations of the ONR by providing transportation at cost to the new Ring of Fire mines, to repay borrowings made at current low interest rates, but amortised over the life of the new mines and rail line.

“This newly developing Canadian natural resource is too important to the national and provincial economies to encumber its exploitation into the next century with thin margins and the uncontrollable cost risks and environmental degradation of trucking.

“It was very fortunate that this globally significant resource was discovered near to a provincially owned railroad network that could address this challenge,” the company said.

The Ring of Fire, located in the McFauld's Lake area of the James Bay lowlands, has attracted much attention over the past couple of years, with exploration drills turning for minerals including chrome and platinum-group metals.