Cliffs eyes more delays [Ring of Fire chromite project] – by Sebastien Perth (Sudbury Star – November 2, 2012)

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

Cliffs Natural Resources admits it may have to delay production at its Black Thor project in the Ring of Fire to 2017. The news came out during a recent quarterly report conference call, nearly a month after Cliffs announced it was pushing back production in the Ring of Fire to 2016.

Cliffs director of global communications Pat Persico said the company is still aiming for 2016, but that could easily change based on the market situation.

“As noted during our earnings call, Cliffs’ CEO Joseph Carrabba had noted that the company has several options and levers we can pull should the market change. One of those levers is capital spending related to our chromite project. Officially, we are working toward the end of 2016, but this could push the production target date beyond 2017,” Persico said.

He said despite the “significant potential” the Black Thor project represents, iron ore prices have caused Cliffs to re-evaluate the project’s timeline.

“This includes delaying the major capital spending outlays. We still expect to complete the feasibility stage of development and environmental assessment by next year. However, we have decided to delay our early works plans until feasibility is complete,” Persico said.

That feasibility plan will go a long way toward determining what Cliffs will do next.

“Based on the study findings and general industry conditions, we will decide next year whether to proceed with execution. The deferral will put pressure on the schedule. However, one of the details we will be working out in the feasibility study is the actual execution plan through startup. We will know whether a 2016 startup is practical when the feasibility is complete,” Persico said.

Cliffs will use the time to explore the option of taking on a partner for the project and will “continue to develop its relationship with the province of Ontario.”

That move was blamed on longer-than-expected discussions on the location of the Cliffs’ ferrochrome processing plant, which is set to be located north of Capreol at Moose Mountain Mine. The smelter is expected to create 400-500 jobs.

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