Minister hopeful

Ontario’s minister of mines remains optimistic Northern Ontario has a good chance to house a proposed 500-job ferrochrome processing facility, despite warnings from Cliffs Natural Resources that power costs could see the province shut out.

Minister of Northern Development, Mines and Forestry Michael Gravelle, reached on Friday during a break from caucus meetings in Ottawa, said the company has said all along it wants to keep all aspects of the multi-billion Ring of Fire project in the region and he believes that’s what will happen.

But when asked if the province would consider reduced energy rates to ensure the entire project is based in Northern Ontario, Gravelle stopped short of a commitment.

“There’s certainly no question the energy costs are a significant factor. We have put in place a number of programs which are reducing energy costs significantly. But as I say, more serious discussions will take place. This is very much a feasibility stage. They are now out there with a public document that indicates their desire to locate their facilities in Northern Ontario and many discussions will follow for that.”
 
On Thursday the Cleveland-based company released a report that labeled Sudbury as the likeliest Ontario-based solution for the FPF, but a company official said they were also taking a hard look at energy rates in other jurisdictions.
 
The company said Thunder Bay, Timmins and Greenstone are all still being considered.

Ferroalloys president Bill Boor said during a conference call on Friday morning he didn’t have a specific rate in mind, but lower is the only acceptable direction for the 300 megawatts of power the FPF would need to operate annually.

“I know that other provinces are certainly at much cheaper rates right now and we’re going to investigate that,” he said.

Manitoba and Quebec are the likely candidates.

Boor also couldn’t say how likely the plant, expected to concentrate about 2.5 million tonnes of chromite into ferrochrome annually, will be built in Ontario. Ferrochrome is used in the production of stainless steel, a key ingredient in the auto sector.
 
“I don’t know if I have a probability, but I know we have approached this project with a strong intent that we could have it in Ontario. The perspective that Cliffs has had from Day 1 dealing with both First Nations and the government, we understand the importance of it for Ontario,” Boor said.

All told, the Ring of Fire project at McFauld’s Lake is expected to create about 1,300 jobs. Five-hundred will be on site at the chromite mine, 300 will come from transportation, including off-loading jobs in Geraldton, and 500 more will be created when the FPC plant is up and running.

The company also wants to build an all-season, permanent road between the mining site and the FPF, should it be built in Northern Ontario. It would likely involve an extension of Hwy. 643 north from Nakina as the Ring of Fire is about 300 kilometres north of the province’s existing road network.

Again Gravelle wouldn’t commit the province to anything, but said they’d be more than willing to listen.

“We are going to be very involved, I believe, in all aspects of the future development in the sense of helping to co-ordinate all the needs that are out there. That’s why we have a Ring of Fire co-ordinator position put in place. That’s why we have a Ring of Fire secretary that we’re developing,” Gravelle said.

“We’re looking forward to having some very serious discussions with Cliffs about all aspects of the project, as we are will all companies that are involved.”

Should the feasibility studies go as planned, Cliffs hopes to have the mine up and running as soon as 2015.

Sudbury was given the nod as Cliffs base case because it met the criteria the company was looking for including the availability of power, logistics and a suitable site.

Both Gravelle and Boor said Thunder Bay is not out of the race.

“This isn’t a done decision by any means,” Boor said, “and we’re going to be coming around to continue those discussions.”

Thunder Bay Mayor Keith Hobbs, in Sudbury for a northern mayor’s meeting, will be holding a news conference at 3:45 p.m. at the Thunder Bay International Airport.

He was not immediately available for comment.