Cliffs Natural Resources makes case for $1.8B smelter – by Carol Mulligan (Sudbury Star – Janurary 21, 2012)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Cliffs Natural Resources is looking to spend close to $3 billion to get its chromite project in Northern Ontario into production, with $1.8 billion of that going to build a ferrochrome processing plant, the company said this week.

Cleveland-based Cliffs released its 2012 capital expenditure plan Thursday.

The company said it will spend $150 million to develop the Black Thor mine site, one of three sites it controls in the Ring of Fire, and $800 million to construct a near-mine concentrating plant.

Not included in those estimates is $600 million to build an all-weather road it says will benefit remote northern communities and other Ring of Fire mining projects.

Because of that, Cliffs says it will be looking to private and “government entities” to share the cost of the road.

The City of Greater Sudbury is keen to have the processing plant, with its hundreds of jobs, located at a brown site in Sellwood near Capreol. Cliffs used that site as a base case in some of its prefeasibility work on the processing plant.

Two other locations, Thunder Bay and Greenstone, are also vying to have the plant built in their communities.

More information on the project will be provided when the company finishes its prefeasibility study in the first half of 2012, the company said in a news release issued this week.

Cliffs spokeswoman Patricia Persico wouldn’t say if Cliffs is showing a preference for a location for the chromite processing plant.

“Cliffs understands there are many interested stakeholders following this project,” said Persico in an e-mail Friday afternoon.

“We have not made a decision about the location of the ferrochrome processing facility, nor do we have a target date to share,” she said.
“Cliffs is still assessing and evaluating a number of alternative locations to select a preferred site to locate and develop the prospective ferrochrome production facility.”

Cliffs is aiming to have Black Thor in production by 2015.

When Cliffs first invested in the chromite deposits in 2009, it predicted production of about 600,000 tons of ferrochrome annually.

After completing some feasibility work, it expects to produce one million tons of export chromite ore concentrate in addition to the original 600,000 tons of ferrochrome.

There was no mention in the capital estimates report about the cost of hydro-electricity, which could be a deal-breaker for the company building its processing plant in Sudbury or even Ontario.

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