Bleak outlook

Ontario is not looking good as the location of a much-sought-after ferrochrome processing facility.

Thunder Bay’s outlook is downright bleak, though the city is not entirely out of the running.

Cliffs Natural Resources on Thursday released a report designed to spur stakeholder discussions for its planned potential development of the Black Thor chromite deposit in the McFaulds Lake area of the province, better known as the Ring of Fire.

The Cleveland-based company named Sudbury as its base-case scenario for the FPC to be located in Ontario, but Ferroalloys president Bill Bloor said unless energy costs are brought under control, the work will likely go elsewhere.

“At current provincial power rates, there isn’t a location in Ontario that is economically viable for Cliffs to build the FPF,” Bloor said in a release issued Thursday evening. “Despite this we have named Sudbury as the base case location, which we believe is representative of a technically feasible site. The viability of an Ontario-based FPF and final selection of the location are still being evaluated.”

The pre-feasibility study is expected to be completed by next September, with a full feasibility study finished in late 2012.

“Assuming prefeasibility and feasibility studies are favourable, we expect to begin production in 2015,” Bloor noted. “In order to achieve this target, we will continue our discussions with First Nations, interested individuals and all levels of government. We continue to be very excited about the potential to develop this project for the mutual benefit of Ontario, the First Nations communities and Cliffs.”

The FPF will use closed electric arc furnaces to manufacture ferrochrome, an alloy of chromium and iron, used in the production of stainless steel.

The company said current estimate shows a requirement of 300 megawatts of power to convert the chromite, which limited their ability to pick and choose.

All is not lost for other Northern Ontario communities hoping to cash in on a share of the estimated $30 billion deposit.

“Cliffs has plans to continue to meet with other Northern municipalities, including Thunder Bay, Greenstone and Timmins, to continue discussing the potential of locating the FPF in their community,” the report says.

Sudbury is part of a larger base-case for the project, which could see as much as 69.5 million tonnes of chromite excavated. Other linked components include the open pit chromite mine and associated housing and infrastructure located at the site, and ore processing facility at the mine site and an integrated transportation system to link all project components that includes a permanent all-season road to move supplies, equipment, lump ore and concentrate to and from the proposed mining site.

The company says the best case “reflects one set of realistic options for the major inter-related components of the project – from mining of the chromite ore to ferrochrome production. These base-case project components do not necessarily reflect the final design, location or scope of the project.”

Other locations are still in the running, Bloor said.

“Cliffs is currently conducting pre-feasibility studies to more accurately determine the viability of this project,” Bloor said. “Our work has progressed to a point that enables more detailed and meaningful stakeholder discussions that will impact our decisions about the project.”