Canadian Chromite Mine Faces Opposition

By Gerelyn Terzo – Exclusive to Chromium Investing News

Northwestern Ontario is closer to becoming host to a multi-decade chromite mining project. The endeavor stands to benefit the local economy but is also alarming residents and environmentalists. Promising deposits have been discovered outside of Thunder Bay, and mining participants are circling the area and positioning themselves for their share of the steel market.

Chromite opportunity

Chromite, which is a dark metallic mineral that is a main component in chromium, is used in the more common and profitable development of stainless steel. Cleveland, Ohio-based iron-ore producer Cliffs Natural Resources (NYSE:CLF) is convinced that the potential value of the chromite deposits located in northern Ontario are worth fighting for. Under a stretch of rocks and water accessible from major railroads and highways are what the company declares as the greatest chromite find on the continent of North America.

The withdrawal and processing of the mineral, known as the company’s Black Thor deposit, would increase Canada’s role in a contentious playing field for chromium production. South Africa leads the world in the production of ferrochrome, which is used to make stainless steel, and is battling China to maintain its position of dominance.

Chromite development roadblocks

In addition to some infrastructure challenges that could interfere with maximizing the potential of the North American minerals, US-based Cliffs has the burden to satisfy both federal and local Canadian environmental requirements for chromite development. It also has the added responsibility to consider First Nations locals, who reside on the grounds where mining activity would commence.

Representatives from a string of First Nations communities have called for their own participation in the review for chromite development in the region. According to a recent declaration by the Canadian Environmental Assessment Agency, however, locals are being overlooked. The environmental group will instead take the reigns of the study to determine what access, if any, chromite miners will have to the area.

Cliffs Natural Resources seeks to construct a smelter on the grounds of an iron mine, which was known as Moose Mountain, that was closed some 40 years ago. Located near Capreol, an Ontario community, the facility would process the chromite that is mined in the McFaulds Lake production site, which is also dubbed the Ring of Fire zone.

If approved, development on the mine is slated to begin in 2015. There are enough chromite deposits there to perpetuate mining activity for approximately three decades. Over the period, Cliffs Natural Resources could produce as much as one million tones of a chromite concentrate and hundreds of thousands of tons of ferrochrome annually, according to The Sudbury Star.

The lives of locals would be notably affected by the decision to allow mining on the lake. Generations have been sustained by the wildlife and ecosystems that have populated these grounds for thousands of years. While residents are not staging any direct opposition to the development of the resources, they are calling for their own participation in the decision-making process and their share of any rewards due them. The decision by regulators to overlook the voice of the locals could open a Pandora’s box.

Chromite’s economic benefit

With Canadian unemployment showing improvement at slightly above 7 percent, chromite development could stimulate the regional economy even further. More than one-thousand jobs could potentially be added if the green light for mineral mining is given by lawmakers. Of those positions, approximately 500 new jobs could be located closest to Capreol.

Generating interest

The mineral-rich area of the Ring of Fire has generated a lot of interest with junior explorers. Companies actively exploring Northwestern Ontario’s potential world-class chromite deposits include Probe Mines Ltd (TSXV:PBR), Ring of Fire Resources (TSXV:ROF), Noront Ltd. (TSXV:NOT), Platinex Inc. (TSXV:PTX) and KWG Resources Inc. (TSXV:KWG).