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Northern cities make a grab for the chromite ring

Ring of Fire developer Noront Resources receives community bid packages for smelter project
Liquid Ferrochrome
Liquid ferrochrome at the Outokumpu smelter in Finland.

Feb. 2 was D-Day for four Northern Ontario cities to make their best pitch in vying for a Ring of Fire ferrochrome processing plant.

That was the deadline Noront Resources marked on the calendar for Sault Ste. Marie, Sudbury, Timmins and Thunder Bay-Fort William First Nation to each deliver their most convincing case on why they should host the $1-billion mineral processing development.

The Toronto-based mine developer will spend the next few months huddled with Hatch project engineers to assess the comparative strengths and weaknesses of each city’s bid.

On the table are 350 permanent smelter jobs for the facility’s first stage, many plant construction jobs, a multitude of service spinoff opportunities, and a huge economic boost for one community that may continue for generations to come as the Far North opens up for mining development.

Noront is the leading mine developer in the remote mineral belt of the James Bay lowlands. Their proposed ferrochrome smelter would process chromite from deposits into ferrochrome, a major ingredient used in stainless steel production.

Leaders in each community all felt confident in the strength of their bid packages.

The City of Greater Sudbury is touting itself to Noront as the home of Ontario’s only two base metal smelters and is showcasing its mining innovation and technical know-how while portraying itself as a community that would embrace the plant, backed by a 77 per cent approval rating in a city-commissioned poll of residents.

“There’s no question we’re a smelter community,” said Ian Wood, Greater Sudbury Development Corporation’s economic development director, “and I think people understand that.”

The municipality is promoting a brownfield property to Noront, located near a former INCO smelter site in Coniston on the city’s east side, owned by nickel miner Vale.

“We know the property’s available and that Vale does not have an alternate use for it, and would be interested in striking some form of deal.”

Wood said the dormant Twin Stacks site, shuttered in 1972, meets all the turn-key infrastructure that Noront requires.

Zoned for heavy industrial use, the remaining buildings and two smokestacks on the partially demolished site – which are privately owned – wouldn’t be of particular use to Noront since modern electric arc furnace technology would be employed.

It’s the property immediately to the south, populated by slag piles, that’s the prime spot.

While Sault Ste. Marie and Thunder Bay are promoting their active Great Lakes ports as an advantage to move semi-finished ferrochrome to stainless steel customers in the U.S., Sudbury believes in an all-rail logistics solution to receive the chromite from the Far North and then ship product to market.

Wood said the city analyzed all of Noront’s plant inputs and outputs, and are “fairly confident that this is a cost-competitive scenario.”

He points to a major railway junction within a stone’s throw of the site where Canadian Pacific-owned track crosses with Canadian National’s transcontinental line, which is “key to Noront’s plan for the Ring of Fire.”

To prepare for their bid, Wood took part in a Sudbury delegation’s trip to Tornio, Finland in January for a first-hand look at the Outokumpu Ferrochrome Production Facility.

The 50-year-old district-sized complex contains a chromite mine, ferrochrome plant, stainless steel mill, and a port on the Baltic Sea.

It’s considered a technologically and environmentally leading-edge industrial site.

While the scale is on par with Sudbury’s, Wood said what resonated with him was his conversation with key industrial suppliers.

“We’re sitting there talking to them and it’s like I’m sitting in Sudbury talking to our guys.”

The parallels made it clear to him that Sudbury has all the tools to make it work.

“I now know exactly what these folks are doing, how they’re producing the wearables, how that’s fitting into the system and literally our guys could start doing that tomorrow. If they got an order, they could start producing that stuff and supplying that plant.”

He was impressed with how the Finns tweaked their plant processes to either neutralize the waste by-products or recycle them into something commercially useful.

Smelter slag is sold as a high-quality, non-toxic aggregate used in road and construction projects.

Outokumpu’s location in the Lapland border region means it’s subject to Finnish, Swedish and Europe Union regulatory oversight.

“They do incredible public health monitoring and have detected no impact on the local biosphere,” said Wood.

In crafting their case to Noront, Wood said they drew from their Finland experience and from local expertise at Vale, Glencore, an industry cluster working group, and the research capacity at Sudbury’s three post-secondary institutions.

“All of those resources would be at their disposal.”

In Sault Ste. Marie, the municipality has taken flak from a vocal few about potential negative environmental and health impacts from a smelter. A few have criticized the city for smokestack-chasing instead of doing more to diversify the steel town’s economy.

But Mayor Christian Provenzano wasn’t apologizing for their ardent pursuit of the facility.

“This is a rare opportunity for a significant capital investment in the community, and I frankly think it’s irresponsible just to sit back and not participate.”

On deadline day, Provenzano and city staff were in Toronto making an in-person pitch to Noront management.

“This is too significant just to slip in the mail, from my perspective.”

Earlier in the decade when Cliffs Natural Resources was the biggest player in the Ring of Fire, the Sault was out of the picture as a host community for a ferrochrome plant. The Cleveland-headquartered miner had a rancorous and litigious relationship with Essar Steel Algoma over an iron ore supply agreement.

This time Essar is backing the city’s bid, along with the secured creditors who are in position to own the city’s cornerstone industry.

The restructuring steelmaker has been under creditor protection since November 2015.

Noront is delaying its decision to allow the restructuring proceedings to conclude. Provenzano anticipates it will wrap up over the next two months.

The city is pushing a century-old brownfield site, owned by Essar, just west of the steelworks. With more than 400 acres of industrial and port lands, the site contains mountains of blast furnace slag.

The property has commercial dock access, natural gas and rail connections, and abundant laydown space for incoming raw material. The city produced a plan for Noront showing how it will upgrade the power connections to the property.

“We believe we’re the best-placed community for that (smelter),” said Provenzano.

“Only two of us (with Thunder Bay) have water to the site. We feel we have a very compelling case to make when it comes to logistics and transportation costs.”

Provenzano said the city is sensitive to public concerns about a smelter but he thinks those fears can be quelled with more community engagement and education to explain the technology.

He reminds all that developments of these types don’t happen without a very rigorous federal and provincial environmental review process.

“If it comes to Sault Ste. Marie, on a very old brownfield site, I don’t think it’s going to have a deleterious effect. I think it’s going to improve that site.”

While “tremendous support” has come forth from the business community and the political leadership to pursue the plant, he agrees with his critics that the Sault needs to diversify by growing tourism and small business. But he sees no reason why the community can’t broaden its industrial base and metallurgical capabilities.

In Timmins, the former Kidd Metallurgical Site, the last smelter permitted in 1980, is being showcased to Noront.

The smelter and refinery were closed by Xstrata Copper in 2010 but the property is being used by Glencore as a concentrator for the nearby Kidd Creek base metal mine. The site will be vacated when the mine closes in 2022.

Mayor Steve Black said Noront won’t find a “more welcoming mining community in Canada” than Timmins.

Black, a trained mining engineer, led a contingent of municipal and economic development staff, and representatives from a local engineering firm, Glencore, and the Ontario Northland Transportation Commission (ONTC) to deliver their presentation at the Noront office on Jan. 31.

Black contends that the Met site has all the natural gas, power and water connections that Noront requested in their competitive bid process.

“We don’t see any major concerns from our perspective in the questions or the content that Noront wanted us to respond to.”

The site has rail service provided by Ontario Northland, which Black thinks gives Timmins a distinct edge.

Since the Met Site has been used as a smelter for years, Black said most residents would have no problem if smelting activity were revived on that property. It would be an easier sell than if a proponent was trying to permit a greenfield area that’s close to a sensitive waterway, he said.

“We haven’t seen any pushback raised in the community. I think most appreciate what mining and metallurgical services have meant to the community since its inception. It was founded as a mining town and remains a very strong mining and processing town committed to the natural resources industry.

“From a long-term benefit, I think the people of Timmins are fully aware of what is on the line with this project.”

Timmins has received support from other northeastern Ontario communities along the Ontario Northland rail line, including an endorsement from the City of North Bay.

“Most of the communities appreciate what an anchor tenant like this would provide for the long-term sustainability of the ONTC,” said Black. He believes, even in a more stringent regulatory environment, that Noront would have an easier time permitting the Timmins site.

“It’s been used for smelting refinery processing before and was active up until very recently as a smelter and refinery. We feel on that front we have some advantage to the proposal there.”

Like Sudbury, Timmins is pitching a rail logistics plan to service the smelter with the help of Ontario Northland, a project partner.

If the Crown agency is positioning itself to haul chromite from Nakina (the likely southern terminus of a north-south Ring of Fire railway) to Timmins, it would have to extend its rail network further west.

Currently, ONTC rail service terminates at Calstock on Highway 11, west of Hearst. CN Rail abandoned the Calstock-Nakina track – the former Pagwa subdivision – in the 1980s, a distance of 117.6 miles.

When Black was asked if there’s any discussion about installing rail in that gap, Black deferred the question to Ontario Northland and Noront.

“There are some discussions that will take place between ONTC and Noront, as well as Glencore and Noront, in terms of the commercial evaluation if Noront accepts that our site should go to that stage. I’m content that they’ll definitely be able to service this project should a partnership occur in Timmins.”

In the northwest, Ed Collins, Fort William First Nation’s economic development manager, thinks the strength of their bid resides in their iron-clad partnership with the City of Thunder Bay.

“We have a great partnership with Thunder Bay. We have the land, the sea, and the rail.”

Two public meetings on the Noront project were held on the reserve and in the city in mid-January to field residents’ questions, mostly about the environmental impacts from a smelter.

Doug Murray, CEO of Thunder Bay Community Economic Development Commission (CEDC), and Timo Haimi, a senior process metallurgist with Outotec, talked about the Finnish experience with ferrochrome processing.

“There’s going to be some opposition,” said Collins. “You’re going to get the pros and cons of any project that comes forward. But don’t hold back. Let them know exactly what’s coming and I think you have a better shot.”

It was initially thought Fort William’s 1,100-acre former Grand Trunk Railway lands would be the ideal spot for the smelter. But once the plant footprint was laid out, the development’s outer buffer zone would have infringed on some homes and part of a waterfront park.

The site being featured is McKellar Island, one of two large islands in the delta of the Kaministiquia River, flowing into Lake Superior.

With ample industrial space, the island has road and rail connections and is the home of the Thunder Bay Generating Station, an underutilized plant that burns wood pellets. Adjoining Mission Island contains a coal-handling marine terminal that once supplied feed to the power plant.

Collins said one questioner at the Fort William meeting asked why the First Nation remains involved in pursuing a plant that could potentially go to neighbouring Thunder Bay.

He stressed their joint venture partnership with the CEDC is founded on bringing economic growth to both communities and the region.

“It’s going to benefit northwestern Ontario greatly if this project goes through. Thunder Bay, Fort William First Nation, and northwestern Ontario need it. I think it would be the logical choice.”

The benefit to Fort William is on the supply chain possibilities, he said, with companies like Coastal Steel and other businesses potentially servicing that plant.

“That’s the main key of what we’re trying to do. We’re trying to enhance the City of Thunder Bay and Fort William First Nation. Our goal is economic growth for newer companies and the companies that we have here, be it gas stations or catering services.

“If a chromite plant comes to Thunder Bay, that’s 200 to 300 jobs, plus 1,000 construction jobs. The housing market here is going to boom.”