11/21/2013 07:38 EST | Updated 01/25/2014 16:01 EST

Cliffs suspends Ring of Fire project in northern Ontario

A major U.S. player in northern Ontario's Ring of Fire says it's indefinitely suspending its chromite project in the mineral-rich area.

Cliffs Natural Resources Inc. says its affiliate, Cliffs Chromite Ontario Inc., will not allocate additional capital for the project. The company blames an uncertain timeline and risks associated with developing infrastructure.

Company spokesperson Pat Persico said the decision affects about 14 staff in Thunder Bay and 17 workers at a camp in the Ring of Fire, located in the James Bay lowlands.

“We will be closing our Thunder Bay and Toronto offices,” she said. “We also have the exploration camp up in northern Ontario … we will … have to look at properly shutting down that.”

A company press release said "we will be working with this talented team of professionals to explore other opportunities at Cliffs."

Persico said the suspension is for an indefinite period and the company will continue to work with Ontario, First Nations and other parties on solutions for infrastructure development. However, they believe it will be a lengthy process.

'Glass half full'

Meanwhile, Thunder Bay Mayor Keith Hobbs said Cliffs' decision could be good news for Thunder Bay.

"I'm not really concerned, other than we've lost an office and we've lost some staff, and that's value added to our community. So that's a loss,” he said.

"But I'm a 'glass-half full' person, and we're going to make the most out of this.”

He pointed to the fact other mining companies may step in to the Ring of Fire with other proposals in mind.

Noront Resources reports it remains on track to deliver an environmental assessment on its Eagle's Nest mine by the end of the year.

That project is focused on nickel, copper and platinum — not chromite, as was the case with Cliffs.

In a press release Wednesday, Noront said it hopes to be the first mine developed in the Ring of Fire.

"Our projections have not been dependent on the development plans of other mining companies,” Noront president and CEO Alan Coutts said.

“We look forward to participating in the proposed development corporation with the First Nations, and the provincial and federal governments to advance infrastructure planning for the region."

'Difficult decision'

Cliffs senior vice president Bill Boor said in a statement Wednesday the company “continues to believe in the value of the mineral deposits and the potential of the Ring of Fire region for northern Ontario.

But, as company spokesperson Pat Persico added, as a publically held company, “Cliffs has a responsibility to allocate its capital appropriately. It came to a point where we're seeing that the timeline here is pretty uncertain and we had to make the difficult decision.”

Persico said there is no restart date for the company's feasibility study and development and exploration activities.

In June of this year, Cliffs suspended environmental assessment activities because of issues impeding the progress of the project.

Politicians weigh in

In spite of the news, Ontario's minister of Northern Development and Mines says the government remains committed to developing this "multi-generational economic opportunity ... with known mineral potential worth $60 billion."

While I am disappointed with Cliffs’ decision, and certainly appreciate the company’s continued interest in the project, our commitment is clear," Michael Gravelle said.

"The province is prepared to invest in vital infrastructure and create the right climate to support development in the region. We will work with key partners to realize these shared benefits."

But NDP Northern Development and Mines critic Michael Mantha disagreed. In a press release Wednesday, he said years of Liberal mismanagement of northern resources are to blame for the announcement Cliffs will be indefinitely suspending operations in the Ring of Fire.

“The decision by Cliffs Resources to halt operations in northern Ontario demonstrates how the provincial government has no plan to develop and grow the mining sector,” Mantha stated.

“For years now all players from industry to First Nations to municipalities have spoken out on the need for a strategy on infrastructure, electricity prices, resource sharing and employment opportunities, yet the Liberals have dropped the ball.”