Ring of Fire junior [KWG Resources] enters the political fray – by Ian Ross (Northern Ontario Business – May 23, 2014)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business [email protected].

KWG Resources wants to inject the Ring of Fire into Monday’s provincial leaders’ Northern debate by placing an ad in one of Canada’s largest newspapers.

The Toronto-based junior miner is issuing a challenge to the candidates to throw their support behind the creation of a Ring of Fire development corporation led by the Ontario Northland Transportation Commission (ONTC).

In advance of the May 26 debate in Thunder Bay, KWG is taking out a two-page ad in the business section of Saturday’s Globe and Mail describing its proposal and containing snippets of proposed legislation, written by the company, inviting the next government to enact it when elected.

The ad will include a link to a website presenting the bill in its entirety. “We’re looking for whoever gets elected to support this legislation,” said KWG vice-president Bruce Hodgman.

KWG Resources holds a key card in the future development of the James Bay mining camps by virtue of its possession of a narrow string of mining claims extending almost 330 kilometres into its Big Daddy chromite deposit.

The company wants to set it aside for a future rail corridor. But rather than get into the railroading business, KWG wants the 112-year-old Ontario Northland to manage it as a public authority.

“The Ontario Northland was designed as a vehicle to develop the North,” said Hodgman. “Why not use this to develop the Ring of Fire?”

Monday’s debate will involve Premier Kathleen Wynne and NDP Leader Andrea Horwath. Progressive Conservative Leader Tim Hudak has declined, citing a scheduling conflict.

KWG’s proposal has been met with indifference by the Ontario government, and Hodgman said the other parties haven’t shown much interest either.

The company argues that if the ONTC were transformed into a corporation, similar to Canada’s port and airport authorities and governed by Northern stakeholders, it will allow project financing to be raised in the capital markets instead of dipping into the public purse to build transportation infrastructure.

Hodgman said the ONTC has been starved for freight opportunities because of the shrunken industrial base in northeastern Ontario, so why not give the agency a chance to stay economically viable?

Two years ago, the Ontario government had placed the money-losing ONTC on the auction block, but recently reversed its decision. The Crown agency still remains in public hands and largely intact, save for its telecommunications arm which is being sold to Bell Aliant.

How access to the Ring of Fire’s extensive mineral deposits will be planned and executed is being left up to consultants hired by the province.

After Cliffs Natural Resources abandoned exploration work on its Black Thor chromite deposit last fall, citing issues such as the lack of a comprehensive government plan to build infrastructure, the Wynne government announced the creation of a Ring of Fire development corporation.

The process of how that corporation will come together has been contracted out to Deloitte Canada.

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