Cliffs Natural Resources Inc., a U.S.-based company that is prepared to spend billions of dollars on the massive mining project, has been unable to build an all-weather road to the site because it would cross land staked by a rival company.
If it can't build the road, Cliffs will have to consider shutting down operations, said Bill Boor, vice-president of ferroalloys.
"I guess it would be fair to say that we have to think about it," he said in an interview with The Canadian Press.
"We haven't made any decision along those lines and we hope we don't get to that point."
But the project is in a "tenuous state," he said. If the company doesn't have a transportation route, it doesn't have a project, he said.
"We've got a fairly high spend rate, so at some point in time, it's only rational or, it's kind of our responsibility to decide whether it's wise to keep pushing," Boor said.
Junior mining company KWG (TSXV:KWG) has staked the most viable corridor through very difficult wetland terrain for a potential railroad.
Cliffs, which suspended its environmental assessment activities in June, asked Ontario's Mining and Lands Commission for an easement over KWG's mining claims.
But the application was dismissed last month, essentially blocking Cliffs from using the land they need to build the road.
Cliffs is appealing the decision and trying to find a solution, but there aren't many options, Boor said.
The legal process could take years, he said, and the company isn't prepared to take on the cost of buying KWG.
Besides, there are other small claimholders along the corridor and the commission's decision "basically gives a road map" to anyone who has a mining claim related to any project to block development, he said.
The only viable solution is for the government to step in, Boor said. It could expropriate the surface rights or withhold a portion of the surface Crown land for the public interest.
Northern Development and Mines Minister Michael Gravelle wouldn't say whether he will intervene or even consider it. But developing the Ring of Fire "remains a top priority" for the governing Liberals, he said Monday.
For years, the Liberals have been touting the Ring of Fire, about 500 kilometres northeast of Thunder Bay, as a major mining project that will help boost the cash-strapped province's economic fortunes, create jobs in the hard-hit north and bring in revenue to struggling First Nations.
It's believed to contain the largest deposit of chromite — a key ingredient in the making of stainless steel — to be discovered in North America. The federal government has compared it to the Alberta oilsands in terms of its potential to create wealth and development.
But Ontario's Liberals "bungled" the Ring of Fire from Day 1, and they need to find a "productive" solution that will allow the project to get underway, said Progressive Conservative Vic Fedeli.
Noront Resources (TSX:NOT), which also has a significant find in the Ring of Fire, is looking at developing an east-west route, he pointed out.
The Liberals don't have a clue what they're doing and it's jeopardizing development of the Ring of Fire, said New Democrat Mike Mantha, who represents the riding of Algoma-Manitoulin.
"Whether this project is done through rail, whether it's done through a road, it's got to move forward, and this province has got to take a leadership role in doing that," he said.
"We're talking about 150 years plus of jobs and economic growth for First Nations and opportunities for this entire province. ... That's what's at stake here."
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