Cliffs picks Sudbury [for ferrochrome smelter] – by Mike Whitehouse (Sudbury Star – May 9, 2012)

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

Greater Sudbury has been formally selected as the site of Cliffs Natural Resources’ prized $1.8-billion ferrochrome smelter, The Sudbury Star has learned.

Announcements that Cliffs has upgraded its massive Ring of Fire project to the feasibility study stage, reached a number of key agreements with the Ontario government and chose Sudbury as the smelter site will be made simultaneously in Sudbury, Thunder Bay and at the company’s head office in Cleveland this morning.

Sources say agreements with the province about infrastructure in northwestern Ontario were key to advancing the $2.75-billion mining, transportation and smelting project to this stage.

Cliffs’ 2012 capital plan called for $150 million to develop the Black Thor mine site and $800 million to construct a near-mine concentrating plant. Cliffs’ Black Thor chromite deposits are 350 kilometres north of the town of Nakina.

The company estimates an integrated transportation system, including an all-weather road from Nakina to the minesite, would require a $600-million investment, which was not included in Cliffs’ initial project costs.

The company has been negotiating with the province to cost-share this infrastructure, as well as cost structuring the roughly 300 megawatts of power the smelter will use.

Cliffs still has to clear provincial and federal environmental hurdles, complete its feasibility studies and negotiate agreements with affected First Nations communities.

A solution to provide electricity to the minesite, which is not on the province’s electricity grid, also has to be agreed. The company’s base case calls for an onsite 30-megawatt diesel power plant.

The Municipality of Greenstone, in which Nakina sits, has partnered with area First Nations communities to press for the smelter to be built at the Exton railway siding near Aroland First Nation.

Their desire is to keep the ore in northwestern Ontario and extend the province’s electricity grid to the minsesite and other First Nations communities in the region.

In addition to Sudbury and Greenstone, Thunder Bay and Timmins were considered possible locations for the plant.

In 2010, Cliffs announced its base-case smelter location was Moose Mountain Mine north of Capreol because of proximity to rail and hydro corridors and Sudbury’s large, experienced workforce. Cliffs reportedly purchased the property last year.

The processing plant and its 400-plus highly skilled, highly paid jobs is considered the jewel of the project.

Bill Boor, Cliffs senior vice-president of ferroalloys, will lead a conference call announcing the company’s plans at 8:30 a.m. today. Cliffs project timeline is not expected to change.

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