OTTAWA - Mining development in the Ring of Fire region in remote northern Ontario has hit another snag.
Cliffs Natural Resources Inc. (NYSE:CLF) says it is calling a temporary halt to its environmental assessment activities for a major chromite mine in the area.
The company says the suspension is due to delays related to the environmental process, land surface rights and negotiations with the Ontario government about building infrastructure in the fly-in-only region.
Senior vice-president Bill Boor says the company is talking to the provincial government and First Nations from the area in the hopes of eventually restarting the environmental assessment.
"While most aspects of the chromite project have advanced according to plan, temporarily suspending the environmental assessment work acknowledges that certain critical elements of the project's future are not solely within our control and require the active support and participation by other interested parties such as government agencies and impacted First Nation communities," Boor said in a news release.
Both the federal and provincial governments have high hopes for billions of dollars of investment in the Ring of Fire — development they hope will bring prosperity to struggling First Nations and royalties to their own coffers..
But neither level of government has made a public financial commitment to subsidize a road that would carry ore from the mine.
Treasury Board President Tony Clement, who has federal responsibility for the Ring of Fire file, said Wednesday he still has faith in the prospects for the area — if not through the Cliffs project then through another proposal spearheaded by junior mining company Noront Resources Ltd. (TSXV:NOT).
"We still have the Noront project which is onstream and is going through various stages of approval," Clement told reporters.
"And I have said from the outset that this project is of such importance and is of such a generational timeframe that there are going to be bumps along the road," he said. "There are going to be zigs and there are going to be zags. I would not place too much emphasis on a particular decision by a particular company."
In addition to a lack of infrastructure subsidies, Cliffs is also facing formal objections from environmentalists and First Nations about how it has framed the environmental assessment.
First Nations are in court with the federal government over how Ottawa's environmental assessment should proceed.
The company also faces legal challenges over land surface rights.
"We remain excited about this project and its potential for Cliffs and northern Ontario," Boor said. "However, given the current unresolved issues, we cannot and will not unilaterally move the process forward and must manage our resources appropriately."
Federal and provincial ministers have compared the Ring of Fire to the Alberta oilsands in terms of its potential to bring wealth and development to the region.
In an interview earlier this year, Clement called it "a project of national significance for decades." He said it will mean jobs, revenues, social development and the possibility of opening new markets for Canadian exports.
“I honestly believe this is in a class by itself,” he said.
But First Nations and environmentalists have long been leery. While none of the area's First Nations have outright rejected Cliffs's plans, they want to see training, benefits, infrastructure and stiff environmental protections.
And environmental groups have raised concerns about mining in an area that serves as one of Canada's largest carbon sinks and is the source of some major rivers.
The Cliffs delay could give everyone time to reflect on how to better handle the mining development, said Anna Baggio, director of conservation planning for CPAWS Wildlands League in Ontario.
"I hope Ontario uses the break to conduct a regional assessment with First Nations and the broader public so that the area's pristine lands and waters can be protected before mining goes ahead further. "