Tuesday 4th August 2020

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Posts tagged ‘chromite’

Stan Sudol to Elon Musk:

July 26th, 2020

Stop fretting over potential nickel shortages and back some potential nickel mines

by Stan Sudol | posted with permission of Republic of Mining

Stop fretting over potential nickel shortages and back some potential mines

As its Gigafactory continues to ramp up production, Tesla already
produces more kWh of batteries than all other automakers combined.
(Photo: Tesla Inc.)

 

Elon Musk is practically begging nickel miners to boost production as potential future shortages would severely impact his ability to manufacture electric vehicles, as the metal is a key component for the batteries Tesla Inc. depends on.

Historically, nickel has always been a boom/bust metal due to the fact the world only produces about 2.1 million tonnes of the material a year, as opposed to a more commonly used metal like copper at 20 million tonnes. And roughly only half of nickel production is of the Class-1 type that is used in batteries that run electric vehicles.

Currently the cost of nickel is nearing a cyclical bottom, hence the reluctance of nickel miners to invest the possible near-billion it takes to bring on a new mine.

Musk is a multi-billionaire and his company stock is at an all-time high. Instead of whining to the mineral industry to invest “their shareholder money” in new nickel production at a time of low returns, here are some suggestions to calm his fear of future shortages:

 

Stop fretting over potential nickel shortages and back some potential mines

“At the heart of these products are batteries,” says Tesla.
But Elon Musk worries about the nickel needed to make them.
(Photo: Joni Hanebutt/Shutterstock.com)

1. Why can’t Tesla start stockpiling Class-1 nickel now during a time of low prices? The American military stockpiled nickel during the 1950s and 1960s as it was in constant short supply due to a booming economy and its use as a critical metal for military production—the Korean conflict, Vietnam War and the Cold War between the U.S.A. and U.S.S.R. What is to prevent the company from stockpiling two or three years’ worth of nickel needed for its car batteries? This would help firm up prices and encourage more exploration or expanded production.

During the 1950s, the U.S. government gave Falconbridge/Glencore a $40-million subsidy—roughly an astonishing $390 million in 2020 dollars—to help develop one of their Sudbury nickel mines and ensure diversity of supply. At the time, INCO supplied almost 80% to 90% of the West’s supply of nickel and the military were terrified of being so dependent on one key supplier. Perhaps subsidizing a few companies that are near production might be the route to go.

 

2. Polish miner KGHM has a terrific nickel deposit—the Victoria in the Sudbury Basin. They don’t seem to be that interested in developing the project that some analysts feel would need roughly a billion to put into production.

For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world.

Just a quick tangent for any Americans or Canadians who are not “mine literate.” For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world. The communist East had the astonishingly rich nickel mines of Norilsk, located in the isolated wilderness of Siberia. There are still enormous nickel reserves in the Sudbury Basin. Why we are not producing more would practically take an entire book to explain!

Why doesn’t Musk try to buy the deposit from KGHM and hire contractors to build and run his own mine? He would get nickel, copper and some cobalt for his car batteries. In addition, the mine would also provide him with platinum group metals and some gold and silver. If KGHM refuses to sell at a reasonable price, Ontario/Canada might enact some sort of “build/sell it or lose it” legislation!

 

3. Sudbury junior miner Wallbridge Mining has some very promising nickel properties in the Parkin Offset Dyke in the northeastern corner of the Sudbury Basin. According to the Wallbridge website, “The quality of the mineralization found in the Parkin Offset is high. The average nickel tenor for the mineralization found within the Parkin Offset is approximately 4%, which is comparable to the tenors of some deposits found in the Copper Cliff Offset Dyke.” Some of the Sudbury Basin’s biggest nickel mines, past and present, are on the Copper Cliff Offset Dyke, hence the importance of that statement!

Unfortunately, Wallbridge is not doing any exploration on this property during 2020 as the company is focused on its Quebec gold properties. Who can blame it with the precious metal hitting $1,900 an ounce? Why doesn’t Musk buy an equity position in the junior and fund it to the tune of $20 million or $40 million worth of exploration on the Parkin Offset Dyke?

 

4. Another junior nickel explorer that might be worth looking at is Canada Nickel and its promising nickel-cobalt sulphide project near Timmins, Ontario. A maiden resource estimate last February showed 600 million tonnes (measured and indicated) at 0.25% nickel and 310 million tonnes (inferred) at 0.23% nickel. As with all junior explorers, financing is always a challenge. Perhaps a significant equity position by Musk in exchange for future nickel and cobalt would ensure Tesla has no problems accessing these critical metals.

 

For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza!

5. And finally there is the enormous mineral potential of the Ring of Fire with a 43-101 nickel deposit owned by junior miner Noront Resources. More nickel deposits may be discovered. Perhaps Musk could chat with Premier Ford and impress on him the importance of shortening environmental assessments and building that road into the Ring of Fire. For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza! In the 1940s, the Canadian-Alaskan highway—roughly 2,700 kilometres—was built in eight months. No typographical error folks, less than one year!

The proposed road is on the traditional territories of Webequie and Marten Falls first nations, who both want it built. Hell, Musk should even consider putting a few hundred million in financing that road—I say this only half in jest as both the provincial and federal levels of government might be broke before construction starts.

And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign.

The Ring of Fire not only has nickel but potentially significant deposits of copper, zinc and various other critical metals along with chromite. And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign. It’s been a little over two years since the Conservatives have come to power and the patience of the entire sector is wearing thin! Road construction would be a terrific infrastructure investment to help alleviate the pending COVID recession/depression!

 

6. Sorry about the Ring of Fire road digression. I have not even mentioned the Thompson, Manitoba Nickel Belt, Newfoundland’s Voisey Bay nickel mine and Quebec’s Raglan nickel deposits, all of which probably have some juniors that could use some seed funding to drill near these world-class deposits—as the old saying goes, the best place to find a new mine is in the shadow of a headframe.

 

So I wish Elon Musk all the best, but please stop complaining about possible Class-1 nickel shortages and perhaps start strategically investing in the Canadian nickel sector yourself, if you really want to ensure that you have access to this vital metal.

 

For a brief history of the extraordinary Sudbury nickel deposits and their geo-political significance, click here.

Stan Sudol is a Toronto-based communications consultant, freelance mining columnist and owner-editor of Republic of Mining.

Posted with permission of Republic of Mining.

Ontario plans direct talks with first nations on Ring of Fire

August 27th, 2019

by Greg Klein | August 27, 2019

Coming well over a year after Doug Ford vowed to drive a bulldozer himself if necessary to start Ring of Fire development, the announcement sounded anti-climactic. But before getting machinery on the ground you need signatures on paper, implied Greg Rickford. Speaking in Sault Ste. Marie on August 27, Ontario’s mines and indigenous affairs minister promised “a new, pragmatic approach to unlocking the Ring of Fire’s potential, one that includes working directly with First Nation partners who want to move at the speed of business, to ensure sustainable development.”

Ontario plans direct First Nations negotiations on Ring of Fire

As other companies left the region in frustration,
Noront Resources expanded its Ring of Fire portfolio.

His official announcement lacked details but Rickford did tell local media he hopes native bands will sign agreements on a north-south road this fall, the Sault Star reported. One community enthusiastic about the proposal was Marten Falls. In a joint statement with Noront Resources TSXV:NOT, the first nation called the proposal “an unprecedented opportunity to transform our socio-economic future. The youth of Marten Falls look toward the Ring of Fire as a generational opportunity that can provide training, employment, business prospects, new revenue for social services and many other opportunities—direct and indirect—for the province. Without the Ring of Fire, economic prosperity for our communities will remain a pipe dream.”

With support from Noront, Marten Falls currently has its own environmental assessment underway for a potential road connecting with the highway about 280 kilometres south. Marten Falls’ ancestral territories cover most of the region’s known deposits, Republic of Mining editor Stan Sudol has pointed out. But other parts of the region sit on land traditionally used by the Webequie and Attawapiskat first nations.

In a thorough analysis published during the Ontario election, Sudol noted that the proposed road could impact a number of small communities: Webequie (with an on-reserve population of 850 people), Nibinamik (400), Neskantaga (250) and Eabametoong (1,500), as well as Marten Falls (400). 

Marten Falls and Noront pledged that they “will continue to engage the additional First Nations communities that are committed to developing the Ring of Fire and its associated infrastructure.”

Noront holds about 85% of the region’s claims, including seven deposits with resource estimates. One of three advanced-stage projects is Eagle’s Nest, described as among the world’s largest undeveloped high-grade nickel sulphide deposits and subject of a 2012 feasibility study.

Rickford called the Ring of Fire “one of the most promising mineral development opportunities in over a century with the potential to sustain up to 5,500 jobs annually across Ontario within the first 10 years of development.”

Read Stan Sudol’s commentary on the Ring of Fire and northern Ontario.

Infographic: Igniting innovation

January 2nd, 2019

Infographic by Natural Resources Canada | text by Visual Capitalist

Infographic Igniting innovation

 

Canada’s mineral sector is at the forefront of technological innovation. Industry experts, academics, government scientists and engineers generate the innovations to ensure the discovery and development of mineral deposits, and the operation and closure of mines.

These innovations support jobs, communities and businesses and are leading the way in reducing and improving the industry’s environmental impact and providing the necessary minerals to build a sustainable future.

The above infographic comes from the Canadian Minerals and Metals Plan and it draws out the use of technology and innovation at every stage of mining.

Innovation and discovery

The first stage of mining is discovering sources of minerals. It is not easy but with advances in exploration techniques geologists are uncovering the minerals for the future, today.

The future will require uncommon types of mineral deposits, such as chromite and rare earth elements. Canada is host to the Ring of Fire chromite deposits in northern Ontario and several well-advanced REE exploration projects to meet demand.

In order to improve the discovery of these deposits, the mineral sector deploys the latest in technology to improve the chances of making the next discovery. Field equipment such as laser-induced spectrometers detect the composition of minerals while in the field.

However, the majority of mineral discoveries will be deeper in the Earth’s crust. This requires collaborative data to identify patterns in complex geology at depth.

The Canadian government sponsors the Targeted Geoscience Initiative, a comprehensive source for information on ore systems throughout Canada. Geologists will be able to contrast and compare mineral resources across the country to develop new insights into economic deposits.

Mapping and mineral analysis generate large amounts of data and the patterns of ore systems. New deposits are not immediately apparent from this data. Through the application of machine learning and computer processing power, geologists could identify new sources of minerals.

Data will drive this initiative as 3D mapping technology and geophysical modelling provide the inputs to uncover ore deposits. These technologies can also lead to more efficient and effective mineral exploration and could extend the life of currently operating mines by identifying new zones for mining.

Finding the resources is the first step. The next is mining.

Innovation for productivity

Once a mine is built on top of an economic deposit, it is time to start moving the rocks.

Using alternative energy such as hydrogen fuel cells and battery-powered vehicles could reduce greenhouse gases of an underground mine by up to 25%.

The knock-on effects go beyond reducing the mineral sector’s carbon footprint, but alternative energy offers cost and productivity savings, as well as improved workers’ health.

Once equipment brings the ore to the mill, it is sorted using high-pulse microwave technologies and sensors that can improve crushing and milling.

Extracting minerals through comminution (the process of crushing or grinding rock into smaller pieces) is the most energy-intensive stage of the mining process. Up to 53% of a mine site’s electricity consumption is due to crushing and milling.

Technological innovation in mine management is not limited to the underground or the earth’s surface. GPS satellites will connect and monitor the mine of the future.

High-accuracy GPS can vastly improve mining safety, productivity, efficiency and environmental management by enabling increasingly precise and automated operations.

Areas that will benefit from GPS will include:

  • Road maintenance

  • Drill guidance

  • Surveying

  • Fleet management

  • Autonomous vehicles

Efficient management of mines during operation will improve the restoration of the ecosystem after mining ends.

Innovation for sustainability and resilience

Mining temporarily changes its surrounding environment but its products supply the critical material for a sustainable future. Innovation and technology will provide the greatest benefits to Earth’s other valuable natural resources, its water, land and communities, by minimizing impact.

Water is crucial to mining and is required at every step of the process. Mining operations deploy successful water recycling to minimize usage and the release of potentially contaminated water to the environment.

Canadian mines generate between 200 and 250 million tonnes of tailings waste annually. New mining techniques can extract and recycle valuable minerals from these tailings.

The critical and final stage of mining is ecosystem restoration. Returning the environment of a mine site to its natural state will help build resilience to the effects of climate change.

Industry experts and academia regularly collaborate to develop and update the best practice guidelines to maintain and monitor the high environmental standards all Canadians benefit from.

Coming full circle

At every stage of the life of a mine, innovation will improve mining’s environmental and economic footprint to deliver tangible benefits to all Canadians.

Posted with permission of Visual Capitalist.

Read more about Natural Resources Canada’s Canadian Minerals and Metals Plan.

The optimistic route

August 26th, 2016

As one Ring of Fire road study disappoints proponents, another surfaces

by Greg Klein

A 2013 expression of Ring of Fire optimism now sounds dispiriting: “With the support of the critical parties, planning and permitting for the main all-weather access road could be completed in 2014, and actual construction operations could commence in 2015.” That was the conclusion of a study commissioned by KWG Resources CSE:KWG three years ago but not published until August 26.

The company posted the 18-page “preliminary scoping exercise” on its website four days after CBC reported that a federally and provincially funded study on the same subject had been completed but not released. Although anticipated to herald a breakthrough, that study simply called for more study, the network stated. Moreover the report didn’t even consider a route to the proposed mining region, focusing only on connecting four native bands with a highway.

As one Ring of Fire road study disappoints proponents, another surfaces

Warmer temperatures make winter roads increasingly
unreliable, according to a KWG-commissioned study.

Release of the $785,000 report would be up to the four communities that led it, Ontario mines minister Michael Gravelle told the CBC. The network somehow obtained a copy but quoted only a few short excerpts. KWG president Frank Smeenk tells ResourceClips.com he wanted to counter disappointment with “an alternative that is feasible, financeable and attractive.”

KWG’s study estimated the cost of connecting its proposed north-south rail line with an existing road near Pickle Lake, about 305 kilometres west, between $83.6 million and $99.9 million. Trunk roads to four reserves would add another $36.1 million to $73.1 million. The four communities total roughly 2,500 people, according to numbers then available to the researchers.

The study didn’t consider expenses related to potential cultural or archaeological surveys, or the environmental assessment.

As for the region’s existing winter road, access “appears … increasingly unreliable as a consequence of warmer winter temperatures.”

Socio-economic benefits would include training and employment, as well as easier access to health care, police, schools and social services. The road would lower shipping and personal travel costs. Economic spinoffs could encourage growth in forestry and tourism, along with industrial, mechanical, transportation, commercial, financial and legal sectors, according to the study.

It was conducted by GreenForest Management, a Thunder Bay-based firm whose previous work included planning, construction and maintenance of 700 kilometres of all-weather roads north of Sioux Lookout and of 360 kilometres of all-weather roads north of Nakina.

Smeenk calls the report, which cost KWG between $25,000 and $35,000, “a good news story” that counters disappointment in the government-funded study.

While a proponent of a north-south railway, Smeenk says year-round east-west road access will be “a necessary ingredient to building the rail, which in turn is a necessary ingredient to creating a mining camp at the Ring of Fire.” A railway would be necessary to develop chromite deposits, the company argues.

But Noront Resources TSXV:NOT proposes to develop its Eagle’s Nest nickel-copper-PGE project first, using an east-west road. That company holds about 75% of the region’s claims, having closed a 75% acquisition of MacDonald Mines Exploration’s (TSXV:BMK) RoF properties this week. Noront holds 70% of the Big Daddy chromite deposit and 85% of the McFaulds copper-zinc deposits. Noront is also KWG’s largest shareholder.

KWG holds 30% of Big Daddy, an 80% option on the Koper Lake project/Black Horse chromite deposit and 15% of McFaulds.

KWG has an agreement with China Railway First Survey and Design Institute Group to conduct a feasibility study on a link to a Canadian National Railway TSX:CNR line 340 kilometres south. China Railway expects to add that to the Ring of Fire library by year-end.

News of the government-funded study prompted opposition politicians to criticize the federal and provincial Liberals. But the proposals seem mired in the duty to consult. On August 25 the Globe and Mail stated it obtained that report’s three-page conclusion. “Some of the unresolved issues include who would own and manage the roads and how the new road connections would affect social assistance payments,” the paper stated. “Some social programs pay more to residents of remote fly-in communities.”

Late August 26 the G&M said it now had the entire 147-page final report, which estimated road-building costs between $264 million and $559 million. “Among the positives, people said road access would make it easier for parents to visit children who must move away to attend high school,” the story noted. “Cheaper food and other goods from the south are also viewed as a benefit, along with new links between first nations communities. Common concerns were that a road could bring more hunters from the south, which could negatively affect trap lines and other traditional hunting practices. Many fear that more drugs and alcohol could reach the communities.”

Clearly nothing is going to be built in that part of Canada without social licence.—Frank Smeenk,
president of KWG Resources

While emphasizing the positive, Smeenk seems resigned to slow progress. “Clearly nothing is going to be built in that part of Canada without social licence,” he emphasizes. “We’ve flown a number of trial balloons on how that might best be accomplished. The best is that the first nations whose traditional territories will be traversed by this transportation infrastructure should be equal partners in it. So we’ve proposed to the first nations of Webequie and Marten Falls that we create an equal partnership in both the mine and transportation.”

In June KWG announced that chiefs of those bands were considering a proposal to place its mining claims in a limited partnership to be held half by KWG and half by the two communities. To buy their way in, KWG offered the bands a non-recourse loan of $40 million.

This week a Webequie drum group opened a new drill program at Eagle’s Nest “to ensure minimal disturbance to the land and water and for the health and safety of the workers,” Noront stated. The project reached feasibility in 2012. Earlier this month, in apparent expectation of the latest government-funded study, Noront said it “anticipates that mine construction will begin in 2018 when road construction starts, resulting in first concentrate production in 2021.”

Despite pessimistic reports of the government-funded study, Noront reiterated its expectation that Ontario will “make a joint announcement with local first nations regarding plans for a shared regional access road before the end of this year.”

The province has committed $1 billion for RoF infrastructure and has asked Ottawa for matching funds.

Update: Ring of Fire road study stalls as KWG rail study proceeds

August 22nd, 2016

by Greg Klein | August 22, 2016

Hours after KWG Resources CSE:KWG updated its Ring of Fire rail proposal, CBC reported that a highly anticipated government-funded road study simply called for more study. Specifically excluded from its scope, the network added, was a route to the potential mining sites.

CBC obtained a copy of the document entitled All Season Community Road Study, Final Report June 30, 2016 and quoted this excerpt:

KWG’s Ring of Fire rail study proceeds, government road announcement anticipated

KWG looks to China to support its proposed railway.

“This study has always been considered to be focused on an all-season community service road rather than an industrial road to connect to the Ring of Fire mineralized zone. Its intention was always to (1) link the four communities together and (2) link the communities to the existing highway system.”

Release of the federally and provincially funded report had been expected since its scheduled completion in June. Ontario has pledged $1 billion to Ring of Fire infrastructure and asked Ottawa for matching funds.

“This study was going to be the one that was going to give us the road map forward, literally,” the network quoted NDP MP Charlie Angus. “Now it’s just going to be kicked down the road for more delay, more study and more excuses.”

CBC stated that Ontario mines minister Michael Gravelle “said those discussions are ongoing and there is no timeline for coming to definitive answers. The study was led by the First Nations and it’s up to them to release it to the public, he added.”

Besides the report’s disappointing lack of a call to action, news that the study excluded the Ring’s mineral deposits will take many observers by surprise. Noront Resources TSXV:NOT favoured an all-season east-west road that would connect its deposits and four native communities with Highway 599 at Pickle Lake, which leads south to a Canadian National Railway TSX:CNR line at Savant Lake.

KWG maintained that rail would be necessary to develop the region’s chromite assets. Noront countered that its nickel-copper-platinum-palladium deposits should be developed first, pending better market conditions for chromite. A road would be the faster, cheaper option, the company argued. KWG has said Chinese investors have shown interest in a railway.

Hours before CBC posted its exclusive, KWG announced that a “conditional bankable feasibility study” for its proposed railway should be complete by year-end. The company stated it has “agreed on the deliverables and timetable” with China Railway First Survey and Design Institute Group to examine a 340-kilometre north-south route linking its properties with CN at Exton.

Noront’s flagship Eagle’s Nest nickel-copper-PGE project reached feasibility in 2012. In an optimistic news release earlier this month, the company stated it “anticipates that mine construction will begin in 2018 when road construction starts, resulting in first concentrate production in 2021.”

Noront’s other Ring of Fire assets include the Blackbird chromite deposit and the Black Thor and Black Label chromite deposits. Noront and KWG hold 70%/30% respectively of the Big Daddy chromite deposit and 85%/15% of the McFaulds copper-zinc deposits. Noront is KWG’s largest shareholder.

Noront recently signed a definitive agreement to buy a 75% stake in MacDonald Mines Exploration’s (TSXV:BMK) regional properties, increasing Noront’s portfolio to around 75% of the Ring’s staked claims.

KWG also holds an 80% option on the Koper Lake project with its Black Horse chromite deposit.

Both companies have faced recent public criticism. Last week CBC reported the Neskantaga First Nation issued a “cease and desist” order to Noront, after the company announced a drill program. An online video posted by KWG drew widespread censure for its display of bikini-clad women.

Champion Iron begins financing on signing $53.3-million deal to buy Bloom Lake

December 11th, 2015

by Greg Klein | December 11, 2015

Obviously betting on better times ahead, Champion Iron TSX:CIA announced a definitive agreement December 11 to buy the Labrador Trough property abandoned by Cliffs Natural Resources NYE:CLF. Still subject to court approval, Champion subsidiary Quebec Iron Ore would get the assets for $10.5 million, around $41.7 million in environmental costs and about $1.1 million in bond obligations. Now all the company has to do is raise the money.

Champion’s bid was approved last spring by a court-appointed monitor of Cliffs affiliates now under bankruptcy proceedings. Champion expects to close in Q1 2016.

Bloom Lake is considered an exceptional opportunity for Champion and one that would not have presented itself without the challenges of the current downturn in bulk commodities.—Michael O’Keeffe, CEO/chairperson of Champion Iron

To help fund the deal, the company also announced a private placement of up to $25 million. Commitments totalling up to $15 million have already come in from two parties, one of them controlled by Champion CEO/chairperson Michael O’Keeffe, who could end up with as much as 19.95% of the company. “Additionally, discussions with strategic partners, funds, government agencies and private investors are at an advanced stage” that might help finance up to two years of care and maintenance “should low iron ore prices prevail during this period,” Champion stated.

Champion sees a potential increase in annual maximum production, previously six million tons of iron fines at 66% iron, to over seven million tons at a similar grade. The company also hopes to reduce costs substantially.

In November last year Cliffs estimated another $1.2 billion would be needed to make Bloom Lake viable. But Champion’s announcement stated, “Even with an extended care and maintenance and planned upgrade period, Bloom Lake could potentially become one of the lowest capital cost iron ore mines in the world.”

Quebec’s Plan Nord fund has put up $20 million to study the feasibility of a new rail line linking the Bloom Lake-Fire Lake region with the St. Lawrence deep-water port of Sept-Iles. Two railways already serve the Trough, one of them a private carrier operated by an ArcelorMittal subsidiary.

Last May Quebec economy minister Jacques Daoust said the province was open to the idea of investing in Cliff’s former Bloom Lake assets. The company’s subsidiary suspended operations late last year before entering creditor protection in January.

In April Cliffs sold its Ring of Fire chromite deposits to Noront Resources TSXV:NOT for US$27.5 million.

Mining-friendly federal budget to fund rare earths and chromite research

April 22nd, 2015

by Greg Klein | April 22, 2015

Canadian mining groups welcomed a number of industry stimulants in the federal budget tabled April 21, among them a $23-million, five-year allocation to unlock rare earths and chromite production. The money, channelled through Natural Resource Canada, would “address the technical challenges of separating and processing rare earth elements for use in advanced manufacturing applications and products,” said a statement from Finance Minister Joe Oliver. “Funding will also support the development of efficient and green processing technologies to reduce the environmental impacts of chromite production.”

Mining-friendly federal budget to fund rare earths and chromite research

Canada could provide 20% of
global rare earths demand, Ottawa stated.

The budget document added, “Canada has the possibility to play a leading role in supplying rare earth elements by potentially fulfilling 20% of global demand.”

The Mining Association of Canada saw a number of industry benefits, including renewed funding for the Targeted Geoscience Initiative, aboriginal training and environmental assessment. “Mining now accounts for a large majority of federal environmental assessments,” MAC stated. “Support for the Canadian Environmental Assessment Agency, and other federal permitting departments, is essential to ensure the timely and effective review of major mining projects.”

Speaking for the Mining Association of B.C., president/CEO Karina Briño said her group will continue “to work with our provincial and federal partners towards one process for environmental assessments in British Columbia.”

The feds also extended the 15% flow-through tax credit for mineral exploration to March 2016. Calling for a permanent credit, Association for Mineral Exploration British Columbia chairperson David McLelland said a PDAC study had found “72% of exploration-stage financing from 2012 through 2014 was by flow-through shares that are made possible by the Mineral Exploration Tax Credit.”

The costs of environmental studies and community consultations necessary for an exploration permit will now be eligible tax deductions. In B.C. those expenses totalled over 21% of exploration spending in 2012, according to AME B.C.

The extension of borrowing limits for the Northwest Territories and Nunavut should encourage infrastructure development, MAC noted. Additional funds for marine safety and the overseas Trade Commissioner Service would also benefit miners, the group pointed out.

MAC president/CEO Pierre Gratton said, “Given the current financial situation and the need for fiscal discipline, I am pleased to see the federal government renew investment in critical areas.”

Ontario hires Deloitte to push forward Ring of Fire development

February 14th, 2014

by Ana Komnenic | February 14, 2014 | Reprinted by permission of MINING.com

Despite the fact that a major stakeholder has iced its project, the Ontario government is making a major push for development of the massive Ring of Fire region.

The provincial government announced on February 14 that it had hired consulting firm Deloitte to help establish a development corporation which would build infrastructure in the Ring of Fire.

Ontario hires Deloitte to push forward Ring of Fire development

“Deloitte LLP will act as a neutral, third-party resource for key partners, including first nations, the provincial and federal governments and industry,” the Ministry of Northern Development and Mines wrote in a news release.

“Work is also underway to help partners build a common understanding of infrastructure needs in the region. A third-party research report will examine existing infrastructure proposals and establish a common technical basis to inform decisions to maximize the economic and social potential of the Ring of Fire region.”

Last year the Ontario government announced the creation of a development corporation for the Ring of Fire which brought together mining companies, government bodies and first nations communities.

Negotiations between these parties have stalled development for some time now. The provincial and federal governments can’t agree on who should pick up the tab and they have yet to reach an agreement with the Matawa First Nations Council.

“We remain committed to making a significant investment to support infrastructure needs in the region, but we need partners to come together so that decisions can be made,” Michael Gravelle, minister of Northern Development and Mines, said in the February 14 statement.

A lack of infrastructure—particularly an all-weather road—has been a major sticking point. Last November Cliffs Natural Resources NYE:CLF suspended its $3.3-billion Ring of Fire chromite project due to an “uncertain timeline and risks associated with the development of necessary infrastructure,” Cliffs vice-president Bill Boor said at the time.

Following the release of its 2014 budget, the federal government was criticized for not including the Ring of Fire.

“The Harper government was willing to invest in Alberta’s oilsands and large energy projects in Newfoundland and Labrador, but won’t partner with Ontario to develop the huge Ring of Fire mineral deposit or meet its infrastructure needs,” Ontario Premier Kathleen Wynne said, as reported by Canadian Press.

The Ring of Fire deposit—located in northwestern Ontario—is considered so economically promising that it’s been dubbed “Ontario’s oilsands.” Its worth in chromite, nickel and gold has been estimated at $60 billion. Key companies with claims in the region include Cliffs, KWG Resources TSXV:KWG and Noront Resources TSXV:NOT, but there are dozens more.

Reprinted by permission of MINING.com

Some praise Cliffs’ Ring of Fire suspension, others not so much

November 22nd, 2013

by Ana Komnenic | November 22, 2013 | Reprinted by permission of MINING.com

Earlier this week Cleveland-based miner Cliffs Natural Resources NYE:CLF pulled out of the $3.3-billion Ring of Fire chromite project in Ontario.

Cliffs chose to indefinitely suspend the project through its subsidiary Cliffs Chromite Ontario because of the “uncertain timeline and risks associated with the development of necessary infrastructure.”

“We continue to believe in the value of the mineral deposits and the potential of the Ring of Fire region for northern Ontario,” vice-president Bill Boor said in a statement. “As we’ve assessed the current challenges in the region and the costs to continue on the current path, we decided to suspend the chromite project indefinitely.”

The company said it would continue to work with the provincial government, first nation communities and other interested parties to resolve the issues, but did not mention a restart date.

The announcement didn’t come as much of a shock: In June the company suspended environmental assessment activities. In October Boor told Canadian Press that there were talks about shutting down the project because the company was having trouble building an all-weather road to the site.

Although Cliffs’ share price took a mild beating from the announcement, dropping from $27.50 per share on November 20 to $25.50 by November 22, not everyone sees the move as a bad sign.

H. Fraser Phillips at RBC Capital Markets said on November 22 that Cliffs made the right decision.

“It has been our view that the project would take years to develop if it could ultimately be developed at all,” Phillips was quoted in the Financial Post.

With today’s chromite prices, Phillips seriously questioned the project’s economics.

By scrapping the Ring of Fire plans, the company can now allocate resources and capital to its iron ore project in Quebec, Phillips noted.

But the province of Ontario might take a different view. In a piece for the Toronto Sun, Christina Blizzard writes that the Ring of Fire’s “flame-out will impact all of Ontario.”

When Cliffs pulled out of the project the company took jobs with it, closing its offices in Thunder Bay and Toronto, as well as the exploration campsite.

The project was valued at an estimated $60 billion in economic development.

Blaming a “Toronto-centric government” that “doesn’t get mining and doesn’t understand northern Ontario,” Blizzard writes: “That clanging sound is $60 billion being flushed down a stainless steel drain.”

Reprinted by permission of MINING.com

Cliffs appeals Ring of Fire road decision

October 9th, 2013

by Cecilia Jamasmie | October 9, 2013 | Reprinted by permission of Mining.com

U.S.-based Cliffs Natural Resources NYE:CLF is not giving up on its battle against Canadian junior KWG Resources TSXV:KWG as Cliffs today appealed Ontario’s Mining and Lands Commissioner ruling that didn’t allow the iron ore giant road access to its US$3.3-billion chromite project through KWG’s mining claims.

Cliffs appeals Ring of Fire road decision

The Cleveland-based company wanted to build an all-weather road to its massive chromite mining and smelting project in Ontario’s mineral-rich Ring of Fire region. But the proposed route would go through lands belonging to KWG, which wants to build a railway connecting to the town of Exton instead.

In a ruling released September 10, the tribunal decided that granting an easement to Cliffs would interfere with KWG’s ability to work its claims since “numerous heavy trucks (passing) every day” would cover up future drilling and sampling sites.

“It’s extremely material,” said KWG president/CEO Frank Smeenk of the commissioner’s ruling. “There couldn’t be any more material information for the owners of KWG.”

The claims on the northern half cover the only ridge of high ground where a road and rail could be built.

Bill Boor, senior VP for global ferroalloys with Cliffs, told NetNewsLedger he believes there can be no Ring of Fire without access to the area.

“Without access to the surface lands to develop the needed infrastructure, there is no project. Our proposed development has the scale needed to develop the road access and is therefore a catalyst for other smaller mining opportunities in the Ring of Fire,” Boor was quoted as saying.

Toronto-based KWG has a 30% interest in the Big Daddy chromite deposit and the right to earn 80% of the Black Horse chromite deposit. KWG also owns 100% of Canada Chrome Corp, which has staked claims and conducted a $15-million surveying and soil-testing program for the engineering and construction of a railway to the disputed area from Exton.

Reprinted by permission of Mining.com