KWG Resources no longer has exclusive rights on a strategic transportation corridor to the Ring of Fire.
On Feb. 25, an Ontario appeals court upheld a divisional court ruling from last year that allows other mining companies to apply for an easement to use the 340-kilometre long route into the remote exploration camp in the province’s Far North.
According to a news release issued by Noront Resources: “The decision allows a proponent to apply for an easement along the corridor without requiring the consent of the claim holder (KWG).”
Noront inherited the court case when it acquired the chromite deposits belonging to Cliffs Natural Resources last spring.
In 2010, KWG took a novel approach to secure access to the Big Daddy chromite property when it used mining claims to stake a route atop some sand ridges with the idea of setting it aside for a future railroad.
But the legality of using mining claims to secure surface rights for a railroad came under scrutiny that entangled the Ontario government and Cliffs Natural Resources, who have since departed Ontario.
An Ontario Superior Court judge last July reversed a 2013 provincial mining tribunal denying Cliffs an easement to use KWG’s corridor to reach its chromite properties. The judge ruled that Cliffs’ activities would not interfere with KWG. The Toronto junior miner then petitioned for the right to appeal that decision, which has now been delivered.
Although KWG has a 30 per cent share with Noront on the Big Daddy deposit, the right-of-way has been KWG’s wild card in having the most coveted and direct route to move large tonnages of chromite out of the James Bay region for processing elsewhere.
KWG used that route as leverage to entice a Chinese railway engineering firm – China Railway First Survey and Design Institute - to investigate the economics of building a railroad to reach the chromite and base metal camp.
KWG contends it will open the door to secure offshore infrastructure capital from Beijing and chromite offtake agreements from the Chinese.
In return for the design and construction of a railroad, KWG said the Chinese could be paid in ferrochrome (processed chromite used in stainless steel production), or possibly semi-finished products.
