Welcome to my 3rd A Northern Blog posting. This post will delve into Cliffs Natural Resources efforts to start up a chromium mine on its Black Thor Property. As this story illustrates it takes a long time to start up a mine. There are oenvironmental assessments to be filed and approved. Ancillary works such as roads and electrical infrastructure need to be constructed or installed. Consultation with nearby communities need to held and agreements reached. Of all the companies working in the Ring of Fire, Cliffs Natural Resources has progressed the furthest, but still has a long way to go. In May, 2012 Cliffs chose Capreol, Ontario near Sudbury to be the location for its ferrochrome refinery. This was an important step. Cliffs now will be focusing on getting environmental approvals, securing agreements with First Nations and other nearby communities and working with the provincial government to secure the construction of a road that will link Black Thor operations to Ontario’s highway system.
I want to thank publisher Glenn Dredhart for the permission to use the article on Cliffs Natural Resources that was originally published in the December, 2012 issue of Mining Life Magazine. For excellent coverage of mining issues in the North and throughout Canada visit the Canadian Mining Portal. Glenn’s company Canadian Trade Ex hosts the largest mining show in the North.
Glenn also is in the process of setting up the Canadian Mining Portal which will carry the latest mining information on the internet including e-versions of Mining Life and Exploration News. http://mininglifeonline.net/
Cliffs Natural Resources May Delay Black Thor Start Up, Continues to Work on Environmental Assessment
By Frank Giorno
Cliffs Natural Resources may defer some preparatory work on the Black Thor site as a result of an earnings call in the last week of October and in light of current iron ore pricing.
“One of the levers Cliffs has to deal with market changes is related to our chromite project, ” said Patricia Persico, Director of Global Communications for Cliffs, in a telephone interview with Mining Life.
“Despite the significant potential this project has for the company’s future, in light of the current iron ore pricing environment, we are reviewing the project’s timeline,” Persico said.
Cliffs is looking to open its chromite mine by the end of 2016, but it has decided to delay early construction work until completion of its feasibility study. This move could potentially delay start up of production into 2017 or even later depending on market conditions and Cliffs’ cash position. In the meantime Cliff will consider taking on a partner for the project. Cliffs still expects to complete the feasibility study and the environmental assessment by 2013.
Cliffs proposes to develop a chromite mine in the Ring near McFaulds Lake. It is currently undertaking a coordinated Environmental Assessment (EA) under the Canadian Environmental Assessment Act and the Ontario Environmental Assessment Act.
“There will be multiple opportunities for the public to participate in the environmental assessment process, “said Patricia Perisco.
Cliffs Resources must obtain approval for its environmental assessment from the Ontario and Canadian government before proceeding to develop the chromite mine, related processing and transportation components, and the ferrochrome production facility. In addition, it must also obtain approval permits for the design of water and wastewater treatment facilities, tailings management, site rehabilitation and air emission controls.
The Ring of Fire is located about 500 kilometres northeast of Thunder Bay and about 70 km east of the Webequie First Nation. It is about 150 km west of the DeBeers Victor Diamond Mine. The area consists of muskeg swamps and has the potential to become a major mining site for chromite, nickel, copper, gold, and other minerals.
Draft Provincial EA Terms of References Released
In July 2012, Cliffs released its draft terms of references for the provincial environmental assessment for public comment to multiple interested municipalities, First Nation communities, federal and provincial government agencies, and non-governmental organizations. The comment period ended in August, 2012 and extensions were granted for some commentators into October. The Terms of Reference document will be updated based on the comments received during the comment period.
The Terms of Reference contains the description of Cliff’s proposal for developing the chromite mine, concentrate process facility, transportation system and the ferrochrome production facility. The operation of these components will be the basis for Cliffs’ Environmental Assessment if approved by the provincial environment ministries.
Addressing the public’s concern about possible negative impacts will be an important aspect of the environmental assessment.
The environmental assessment will help determine the best way to carry out the mining, transportation, processing and refining operations by evaluating potential impacts on the environment by the Project. It also will contain information about how potential negative impacts will be mitigated or eliminated through Project design or utilization of alternatives.
The federal Environmental Impact Statement guidelines, the coordinated counterpart to the provincial EA Terms of Reference, were finalized in December 2011.
Cliffs Natural Resources’ Proposal
Cliffs proposes to operate an open pit mine that will be used to extract ore at a rate of approximately 6,000 tons to 12,000 tons per day. At that rate of extraction, Cliffs anticipates the open pit will operate for 30 years
According to Persico, “One million tons per year of chromite concentrate will be produced at Cliffs’ concentrate processing facility located at the mine site and direct shipped to international ferrochrome producers.
The proposed Capreol ferrochrome production facility will produce 600,000 tons of ferrochrome per year for export to markets where stainless steel is produced. Persico explained the needs differ for the North American and Asian markets. In North America and Europe, ferrochrome is in demand, while in Asia where there is already ferrochrome processing facilities, it is demanding chromite concentrate.
North-South All Season Road
A critical element in developing Cliffs’ Black Thor open pit mine and the ore processing facility will be the construction of a north-south road. It will be crucial for transporting supplies, materials and concentrate between existing infrastructure and the mine site.
The north-south road will facilitate the trucking of concentrate in sealed cargo containers from the ore processing plant to an existing rail network 340 km to the south of Black Thor via the combination of a new all-weather road and existing provincial resource roads.
The vehicles will travel 80 km of existing provincial resource roads on the southern end of the route to access the proposed transload facility located near an existing Canadian National Railway siding where the concentrate cargo containers will be transferred to rail cars and shipped to Capreol.
The Aroland First Nation is located west of the proposed transload facility. Over the summer, it was among the First Nations who threatened to issue eviction orders to companies doing exploratory work in the Ring.
Discussions between Cliffs and the Ontario government proceeded and agreement in principle was reached on key elements of the chromite mine development, including construction of an all-weather north-south road that will facilitate transportation to the transload facility.
At this time, Cliffs is engaged in discussions with the province of Ontario regarding a north-south All-weather Access Road that will connect the Project mine site to existing provincial road and rail infrastructure. It is anticipated that First Nations and other natural resource companies will be provided access to the All-weather Access Road. Cliffs expects that access to the All-weather Access Road will generally be managed in a manner similar to other provincial resource roads, although the exact terms of such access still need to be discussed between Cliffs, area First Nations and the Province. At present, Cliffs anticipates that it will design, construct, own, operate, and maintain the road. It is envisioned that the discussions with the province of Ontario will be completed in the near future.
Capreol Ferrochrome Facility
In May 2012, Cliffs announced, Capreol’s Old Moose Mountain as the location of its Ferrochrome Production Facility (FPF). In explaining its decision to choose the Sudbury location over other Ontario, Quebec and international locations, Cliffs said that the Sudbury area had greater potential due to various economic and technical factors, proximity to electricity supply, better transportation, and labour markets.
Cliffs produced a supplementary EA Terms of Reference for the environmental assessment on the FPF and released for public review. According to the Terms of Reference document, the FPF will use an enclosed electric arc furnaces to process approximately 3,000 to 4,000 tonnes of concentrate to produce about 1,250 and 1,750 tonnes of ferrochrome.
Cost of Developing and Operating the Mine
According to Persico, Cliffs estimates it will invest approximately $3 billion to develop the chromite mine and onsite processing facility, the transportation component and the Capreol FPF.
The mine is estimated to cost $150 million and the near-mine processing facility $800 million. The ferrochrome facility in Capreol is slated to cost $1.8 billion and the transportation components $600 million.
Persico says the benefits to Northern Ontario include the creation of 1,200 jobs to construct the mine, processing plant and the ferrochrome facility. Another 1,200 jobs will be created once the mine, plant and facilities are operational.
The jobs would benefit Northern Ontario, including members of the First Nation communities. Additional benefits will arise through business opportunities for suppliers who will have the opportunity to bid on contracts both during the start up period and when the mine becomes operational.
Persico said that Cliffs is committed to ensuring the communities in the Ring of Fire, along the transportation route and near the ferrochrome facility benefit from its activities.
“Cliffs Natural Resources has a 160 year history in Michigan and Minnesota of successfully investing in the communities where it locates,” Persico said. “We are a sustainable company that invests generously in our communities.”
Working in Cooperation with First Nations
Before Cliffs chromite mine can be developed, it must receive approval for its environmental assessment, negotiate agreements with First Nation communities whose lands will be affected and reach a final agreement with the Ontario government on the provision of infrastructure that will make the mining project feasible.
Persico said Cliffs is working towards agreements with First Nations near the Project components. There are multiple First Nation communities in the area and along the transportation route.
“Cliffs Resources is respectful of their heritage, lands, and traditional knowledge,” Persico said, “Negotiations are further along in some communities and others are evolving.”