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MONTREAL — Cliffs Natural Resources Inc.’s Canadian adventure is winding down. The Ohio-based mining giant is preparing to shut down its money-losing Bloom Lake iron ore mine in northeastern Quebec amid rock-bottom prices for the mineral and high operating costs. It has already closed a Labrador iron ore property at Wabush and said it is looking to sell its chromite deposits in northern Ontario’s Ring of Fire.
Cliffs has spent hundreds of millions of dollars developing the high-potential Ring of Fire deposit and the existing Lake Bloom operations, but has run into a series of roadblocks, including a five-year low for iron ore prices, slumping Chinese demand and major delays in getting agreements with Ontario and First Nations over essential infrastructure for the Ring of Fire.
A shutdown of Bloom Lake would be a major blow to the local economy and to the provincial government’s multibillion-dollar Plan Nord economic development strategy pinned on natural resources extraction north of the 49th parallel.
Likewise, the Ontario government had made the Ring of Fire the centrepiece of its ambitious development plans for the mineral-rich region about 500 kilometres northeast of Thunder Bay in the James Bay Lowlands. And Cliffs had been the leading mining player in that plan.
Cliffs chief executive officer Lourenco Goncalves said in an interview that Ring of Fire no longer fits the company’s strategy of returning to its roots selling iron ore from its mines in Michigan and Minnesota to U.S. buyers.
And he said he has run out of time at Bloom Lake because one of three potential partners in a $1.2-billion (U.S.) expansion plan said it couldn’t make a decision within Cliffs’s tight time frame.
About the Ring of Fire, Mr. Goncalves said: “I did not buy that area and I would have never done that in the first place. Someone that was at Cliffs did it before me.”
At any rate, there is “no hope” Ring of Fire will be developed in the next 50 years because of the lack of infrastructure and lack of buyers for the valuable chromite deposit, he said. Chromite is used to harden steel while iron ore is a key material in steel making.
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