This article came from Northern Life, Sudbury’s biweekly newspaper.
Representatives visit Sudbury
There were a lot of complicated factors, but Cliffs Natural Resources is confident that Sudbury is the right spot to build its ferrochrome smelter, the company’s president and CEO said.
Hot on the heels of its announcement on May 9, Cliffs representatives, including Joseph Carrabba, braved a thunderstorm en route from Toronto to Sudbury to pay a visit to the Nickel Capital.
It was a whirlwind tour, and while Cliffs representatives weren’t in town for very long, they “felt it most appropriate and respectful to be in the community and introduce ourselves to the mayor and everyone else who has been so helpful in the process just so people will be able to put a face to the name,” Carrabba said.
Cliffs received approval May 8 from its board to move into the feasibility stage. This move will see the eventual construction of a $1.8-billion ferrochrome processing plant north of Capreol, as well further work on the development of Cliffs’ Black Thor chromite deposit, an open-pit operation 540 kilometres northeast of Thunder Bay that will eventually lead into an underground operation once it becomes necessary to extract the ore from greater depths.
Black Thor is a “massive” project for Cliffs, “our biggest project by far that we have ever tackled, and we are confident we can do it.”
The smelter in Sudbury will process 1.2 million tonnes of ore per year, just over 50 per cent of the expected 2.3 million tonnes per year from Black Thor. The ore smelted in Capreol will create about 600,000 tonnes of finished ferrochrome for the stainless-steel industry, Carrabba said.
Cliffs has pegged 2015 as the year to get into full operation of the mine, but the plan is to break ground on the smelter in late 2013. More details will be made available leading up to that project. Furthermore, plans are already being put in place to start the hiring process, but it won’t happen for at least 18 months, Carrabba said.
“It will have to be well in advance of the building, because we do like to have the operators involved in that process, as well as with the design, so that they are comfortable with it when we push the green button,” he said.
While proponents in Sudbury are clearly happy with the news, others across the province aren’t. Opposition from other communities have been highlighted in media reports, but Carrabba said he isn’t making any apologies for the final decision.
“I realize a lot of folks aren’t happy with the decision (to build the smelter in Capreol), but many are,” Carrabba told reporters. “We’ve been very careful in our considerations, and we’ve been as transparent as we could be through this entire process. There can never be as much transparency as people would like to see, but those who work in these business climates understand what you have to do and what you don’t have to do.”
Carrabba said there were many factors weighing on Cliffs’ decision, but it was the access to technical skills and mine service skills needed by Cliffs that helped put Sudbury at the top. Sudbury is great location to ship out the product at the end of the day, either to China or Asia or to the U.S. and over to Europe, he added. Furthermore, the abundance of skilled workers in the area provides “a great opportunity for a great workforce.”
Power rates were a huge consideration of the location of the smelter, Carrabba said. Power is a very big cost component of ferrochrome smelting, and if Cliffs wants to be competitive with South Africa, the major supplier in the world, it has to have a good power rate to go forward.
“We think we’ve struck the right deal to do that,” he said. “It was always our preference to stay within Ontario, but we have to look at all business cases, and we are very happy with the final economic conclusions that allowed us to stay within the province.”
Whether any organization has the power to stop Cliffs from setting up its smelter in Capreol is irrelevant, he said, because “Cliffs doesn’t work that way.”
“We will come to resolution with the First Nations,” Carrabba said. “A lot of thinking, engineering and transportation factors were weighed on this decision. It was a very complex decision. Economics certainly do come into it, and that is certainly the biggest driver, but it’s also about building it in a community like Sudbury. We had to be in a place where mining is known and it’s welcomed.”
Communities that oppose the decision need to look at the bigger picture, he said. The project as a whole will have regional benefits in the fact it will create 1,100 to 1,200 jobs overall, and there will be job creation in the Thunder Bay and Ring of Fire areas.
Furthermore, following the May 9 announcement, discussions will begin on the proposed development of a new all-season road to run south from the Ring of Fire to northwestern Ontario. The company is investing $1.8 billion into the smelter, but the remaining $1.5 billion will be used to establish the mine and an all-season north-south road from the Ring of Fire to communities in northwestern Ontario.
“Getting that north-south road built will make a monumental difference in people’s livelihoods and their overall quality of life,” Carrabba said. “I know there is disappointment, but I make no apologies for this decision. Business decisions have to be made for the benefit of all to get a project like this up and running, but at the same time, we will work with all parties to come to a resolution.”
Cliffs has been around for 165 years, he added, and the company has always been big in the communities in which it is located.
“We have to prove what we claim, and I think you will be satisfied with the results,” he said.