Published on: 12/23/2009 10:56:27 AM Print | Font Sizes:  Normal Text Large Text

Ring of Fire mine, railway 'will change lives'



Winter operations on McFauld's Lake in the Ring of Fire.
Winter operations on McFauld's Lake in the Ring of Fire.

 
Bob Middleton likens the discovery of chromite in the James Bay Lowlands to the 1903 Cobalt silver discovery that opened up Northern Ontario and created the great mining camps of Timmins and Kirkland Lake.

The potential impact of a massive open-pit mine, ore processing facilities and a railway into McFauld's Lake, as proposed by Cliffs Natural Recources, will be a life-style changer for many living in remote First Nation communities, said the exploration industry veteran.

"It's going to change the economy of this whole region,” said Middleton, director of Aboriginal and regulatory affairs with Canada Chrome Corp.

Cliffs' $240 million stock offer to Freewest Resources, which together with KWG and Spider Resources, found some of the richest chromite deposits in the world, will be voted on by Freewest shareholders in January. The Freewest board is recommending approval of the Cliffs offer.

Middleton outlined his company's role in a high-grade chromite resource in the area now called the Ring of Fire during a presentation at the Ontario Exploration and Geoscience Symposium, Dec. 16 in Sudbury.

Canada Chrome is a subsidiary of KWG Resources Inc., one of the companies involved in the $1.5 billion development, which includes an $800-million mine scheduled to go into production by 2015.

Cleveland, Ohio-based Cliffs, a global iron ore pellet and coal producer and an established industrial railway builder, is expanding into the stainless steel market with the development of North America's first chromite mine.

Chromite is processed into ferrochrome used in making stainless steel.

Canada Chrome will operate the mine and build a 350-kilometre long haul railway capable of moving four-million tons of ore a year from McFauld's Lake to Nakina in northwestern Ontario to connect with the Canadian National Railway's (CN) main line.

Middleton said there is enough tonnage in the McFauld's Lake deposits to see chromite production last 150 to 200 years.

The economic and social impact will be far-reaching for First Nations and northwestern Ontario communities.

The entire project will create 4,500 direct full-time jobs with a multitude of spinoff employment.

In his meetings with local First Nation chiefs, Middleton emphasized how critical the training will be in laying the groundwork for a resident workforce.

"The kids that are in Grade 9 right now are going to be the ones coming into the mainstream for employment five years away."

Middleton is working with the Matawa First Nations, a tribal council of nine communities include Fort Hope and Marten Falls, to immediately pursue government job training funds.

"This (railway) route will change the lives of all of these communities and for the first time bring everybody together,” he said.

He anticipates there will be freight generated by other miners and geographically isolated communities.

“It's going to open up everything. All the other gold, copper, nickel discoveries will be serviced. All the supplies will come north for building and construction, bringing everything, including groceries.”

Two north-south routes have been proposed. The more-favoured western corridor follows a system of glacial eskers, the only high ground in the flat muskeg swamp of the James Bay Region.

The southern terminus is near the Aroland First Nation, just west of Nakina. A former Buchanan mill site at nearby Exton could be used as a staging area for equipment and supplies heading north, said Middleton.

A long service road may run parallel to the track. In late November, Cliffs officials considered placing a smelter and an electric arc furnace complex somewhere in the Thunder Bay area. It would produce as much as 800,000 tonnes of ferrochrome per year to ship to U.S. stainless steel producers in the Great Lakes region.

An ore processing mill with a gravity separator is also needed, said Middleton.

Where these facilities will be sited is an equally big prize.

Thunder Bay seems to be the front-runner, but there are some logistical snags.

"We originally thought this would all go down to Thunder Bay where there's lots of power, people and we could bring (coking coal) in by boat,” said Middleton.

But CN Rail removed the tracks last summer from its Kinghorn line linking Longlac and Thunder Bay.

"It would have taken a cheque of $30 million to stop them from tearing it up because they're selling the rail to another project in the tarsands,” said Middleton.

“All that rail is leaving Ontario to go out to Alberta. So that kind of killed an easy way of getting chromite to Thunder Bay."

Middleton said shifting freight between CN and Canadian Pacific Railway is an expensive proposition.

"It's starting to look like the Longlac-Nakina-Geraldton area will become the focal point for processing,” Middleton later said in an interview with Northern Ontario Business.

Securing a large power supply is also a big consideration. Middleton suspects there may be excess hydro-electric power capacity in the Nipigon area left over from demise of the lumber industry that could used for ore processing.

The potential magnitude of the Canada Chrome project stands to be a real game-changer when it comes to the McGuinty government's Far North Act (Bill 191), not yet enacted into law. The legislation proposes setting aside half the Far North forests for protection.

While its implications worries many in the mineral exploration community, Canada Chrome has safeguarded its rail corridors by staking a string of claims from McFauld's to Nakina, which they intend to drill for mineralization.

Middleton said KWG will do what it takes to comply with all environmental regulations, but added this is a major mining project that will be recognized by Ottawa as having national economic importance for First Nations.

"This project has to be paid attention to."

There are major rivers to cross including two that have been declared provincial parks – the Albany and the Attawapiskat.

Baseline environmental work is already underway to study the geochemistry of the lakes and streams in advance of three years of major environmental assessment work leading up to construction.

Middleton said he doesn't expect Bill 191 to have any impact on the development.

While the project's size and impact could be eligible for government infrastructure money, Middleton said if they get an important federal tax ruling, the mine railway could be qualifed as a Canadian Development Expense under the Income Tax Act. This would allow the project to be entirely privately financed through a special flow-through fund. 

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