Ring of Fire lights up Northern Ontario’s mining industry
Thanks to Ontario Business Report February 2012
In 2002 DeBeers, the world’s leading diamond miner and trader, ventured into Ontario’s far north muskeg near Hudson’s Bay seeking the precious stones. What it discovered instead was copper and zinc.
But that was enough to spark a flurry of other exploration efforts. One potentially commercial find led to another, and by 2008 prospectors struck gold, so to speak. What they uncovered, for the first time in commercial quantities anywhere in North America, was an extremely rare mineral called chromite. The discoveries are so vast that the Ontario mining industry and others speak of a multi-billion dollar deposit that may take generations to fully exploit.
Indeed, the province considers the chromite and related discoveries in a 5,000-sq-km region now known as the Ring of Fire as “historic.” Says former Northern Development, Mines and Forestry Minister Michael Gravelle: “It’s home to one of the most promising mineral development opportunities in Ontario in more than a century.”
Chromite, when processed into an alloy, is used in the production of stainless steel, among other products. It is highly valued for its ability to increase hardness, toughness and resistance to corrosion. In thin chrome-plated coatings, it protects auto parts, appliances and an array of other products including weapons.
Just four countries account for 80 per cent of the world’s chromite production. They are South Africa, the single largest supplier, along with Kazakhstan, Turkey and India. China’s booming economy purchases half the world’s supply. The United States buys about 15 per cent.
Ontario is committed to developing the chromite and other deposits in the Ring of Fire as quickly as possible and with due regard to environmental impacts and the needs of the Aboriginal communities within the region. “We have to be concerned with the broader context,” says Christine Kaszycki, appointed by the province last year as coordinator of a new Ring of Fire Secretariat. The government established the secretariat to help move the various mining and related infrastructure projects forward.
Adds Kaszycki: “This is not just about building mines or roads. The entire province will feel the positive economic impact, especially the north with its mining consulting and equipment industries, as well as its supply and service sectors. We have to get it right, especially for the Aboriginal communities to ensure they have the tools to fully participate in the development.”
Experts say there is enough chromite in the isolated and inhospitable Ring of Fire to meet North American needs for two centuries.
As coordinator, Kaszycki’s role is to work with other provincial ministries, the federal government, local communities including First Nations communities, the mining industry and other stakeholders to facilitate the orderly development of the Ring of Fire’s massive potential.
Interested parties are welcoming the secretariat. “Establishing the Ring of Fire Secretariat shows the province’s commitment to development of this discovery,” says Christy Marinig, CEO of the Economic Development Corporation in Timmins, a northern community where one-quarter of the labour force derives its living from mining, either directly or indirectly.
Chris Hodgson, president of the Ontario Mining Association, agrees. “With the secretariat, the government has the right structure to get everyone in the room and proceed in a timely fashion. They understand the importance of this opportunity.”
At present, there are two mining proposals moving forward. Chromite is not a factor in one of them, at least not yet. Noront Resources of Toronto instead wants to develop its nickel as well as copper and platinum reserves in a distinctive fashion. To minimize the environmental impact, it is proposing an underground mine, mill and tailings storage facility. According to company president Wes Hanson, the idea is to “build a mine you can walk over and not even know is there.”
The company hopes to start production in 2015. While Noront also has substantial chromite holdings, mining this resource is to come later. A Chinese steel producer earlier this year purchased some 20 per cent of the company, a clear sign of the global interest in the region’s mineral wealth.
Meanwhile, Cliffs Natural Resources of Cleveland, Ohio has an even more ambitious timetable for developing the Black Thor chromite deposit it purchased for $240 million in 2010. It hopes to have all the permits and environmental assessment approvals by the end of 2013. “That’s aggressive but achievable,” says William Boor, who is overseeing the proposal as senior vice-president for Global Ferroalloys, a division of Cliffs, one of the world’s leading mining companies.
One reason for Boor’s optimism is the encouragement and help the project has received from the Ring of Fire Secretariat and the Ontario government. “They want to make this work,” says Boor. “We feel totally supported by the province.”
The Cliffs proposal calls for an open-pit mine, at least for the first 10 to 15 years. The operation also requires a ferrochrome production facility that refines the ore for use in making stainless steel. That process requires 1,700-centgrade furnaces that consume enormous amounts of electricity. Boor says the facility will require 300 megawatts annually – larger than any electricity consumer in Ontario.
To encourage development, the province offers significant incentives to reduce electricity costs in the North, especially in the resource sector. Says Boor: “The power rate is a big factor in whether this proposal goes ahead.”
Boor is reluctant to put a price tag on the Cliffs proposal, but observers expect it to cost about $1.3 billion and create more than 1,000 jobs between the mining site and the production facility. For its part, however, Noront has put forward a specific cost estimate – $734 million.
These estimates do not include the substantial cost of transporting materials to market or, in Cliffs’ case, first to a processing smelter. Both projects are some 300 kilometres from either the nearest road or rail link. Helping stakeholders sort through competing infrastructure transportation proposals – which route and whether it should be an all-weather road or rail line – is one of the many issues Ring of Fire Coordinator Kaszycki is attempting to resolve. The cost could be as much as $2 billion.
Kaszycki, various government bodies and environmental agencies are considering the broad impact the different transportation proposals would have on the environment, on Aboriginal communities as well as on mining other deposits in the faraway region. “Once the basic transportation infrastructure is in place, it will provide the potential to unlock additional development opportunities,” she says.
Exploring in these remote wetlands with their harsh climate is expensive enough. Maps and aerial surveys are the first line of attack. Test drills follow only when prospecting companies are comfortable with the risk. Another consideration will be the cost of bringing electricity transmission lines to the region for mines and their camps, as well as to remote Aboriginal communities.
RING OF FIRE QUICK FACTS (All numbers approximations)
Size: 5,000 square kilometres; most discoveries to date are in a small, 20-kilometre long strip.
· 1,000 kilometres northwest of Toronto.
· some 300 kilometres away from nearest rail line or highway.
· two hours flying time north of Thunder Bay, 500 kilometres away.
Number of claims: 30,000
Number of prospecting companies: 35
Significant discoveries: chromium, copper, zinc, nickel, platinum, vanadium and gold.
Number of current development proposals: two
The Ring of Fire name: Noront founder Richard Nemis was company president when the first significant mineral finds were made in the region. A lifelong Johnny Cash fan who liked to dress all in black, Nemis named the region after one of the country-and-western’s singer’s most famous ballads.
Some 30,000 claims have been established to date in the region. Many discoveries – chromite, nickel, copper, zinc and gold – have great potential to be developed once the Noront and Cliffs projects pick up more steam.
Although no diamonds have been found, the Ring of Fire promises to keep Ontario on the global mining activity map for decades to come.