POLITICS

Ontario Liberals Killing Massive Ring Of Fire Project: Critics

11/21/2013 11:27 EST | Updated 01/25/2014 04:01 EST
CP
TORONTO - Ontario's governing Liberals are killing development of the Ring of Fire — believed to have the economic potential of Alberta's oilsands — by failing to stop a big player from pulling out of the project, critics charged Thursday.

Plans to mine the massive chromite deposit in northern Ontario suffered a major setback after U.S.-based Cliffs Natural Resources Inc. said it won't spend any more money on the project and suspended its operations indefinitely.

The Liberals ignored the warning signs that Cliffs — which was prepared to pour billions of dollars into the project — might pull out as development stalled due to a conflict over access to the site, said opposition critics.

"Guys, you just blew a $10 billion-dollar deal of a lifetime and you're about to put more people out of work," fumed Progressive Conservative Vic Fedeli.

It's not just a blow to hard-hit Ontario, it's also sending a message to other major mining companies that they can't do business in the province, said Tory Norm Miller.

"You sold hope to the people of northern Ontario and have failed to deliver," he said in the legislature.

"First Nation communities, cities like Thunder Bay and Sudbury are all waiting for the investment in jobs that this project would bring."

Late Wednesday, Cliffs said it was suspending operations, citing an uncertain timeline and risks associated with the development of necessary infrastructure to the project. About 58 jobs are affected.

The company wants some clarity on infrastructure and other issues before they spend any more money, said spokeswoman Pat Persico.

"We're trying to preserve the value of our assets," she said from Cleveland. "We're not looking to sell them."

Cliffs wanted to build an all-weather road to the site, but junior mining company KWG (TSXV:KWG) had already staked the most viable corridor through very difficult wetland terrain for a potential railroad.

Cliffs suspended its environmental assessment activities in June and asked Ontario's Mining and Lands Commission for an easement over KWG's mining claims. The application was dismissed in September and Cliffs has appealed.

Last month, the company told The Canadian Press that if it couldn't build the road, it would have to consider shutting down operations.

Another company launched a lawsuit, saying the province should have helped them to reach mining agreements with aboriginal communities in the area.

A few weeks later, the Liberals announced a development corporation to bring together private and public partners, including First Nations and mining companies.

But it was too little, too late, critics said.

"Their bungling has snuffed out an amazing opportunity for northerners and for Ontarians overall in terms of jobs and resource development," said NDP Leader Andrea Horwath.

For years, the Liberals have been touting the Ring of Fire as a major mining project that will help boost the cash-strapped province's economic fortunes, create jobs and bring in revenue to struggling First Nations.

Premier Kathleen Wynne insists the project isn't dead and there are many other interested companies. But there needs to be some "collaboration" on developing infrastructure, she said.

"There's no stepping back on our part," Wynne said.

"The resource that is in the ground in the Ring of Fire is not dependent on one company developing it. There are many opportunities and we're going to continue to work to make sure that it happens."

Fedeli mocked the Liberals for trying to assure voters that the Ring of Fire is a "multigenerational opportunity."

"My question is, which generation did you have in mind to finally get around to doing something?"

Persico said Cliffs is closing its Thunder Bay and Toronto offices, as well as its camp. Some employees will find work elsewhere at the company, but some will be cut.

Cliffs' decision to stop work may not be all negative, said Alan Coutts, president and CEO of Noront Resources, which is developing the Eagle's Nest nickel-copper project.

"It certainly will get attention to the fact that timelines and uncertainties around resource development in this region can't extend forever," he said.

"There have to be some timing decisions made and I'm hoping that this will light a fire in the Ring of Fire."

But there does need to be road infrastructure into the area, said Coutts, whose company is looking at a different east-west route.

The Ring of Fire is 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 oilsands in terms of its potential to create wealth and development.

— with files from Craig Wong in Ottawa.

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