A junior miner will soon be the biggest player in Ontario’s fledgling Ring of Fire mining development, after agreeing to pay US$20 million for the properties of Cliffs Natural Resources, a U.S. mining giant who has abandoned hope of developing the area.
Toronto-based Noront Resources is getting quite the deal for about 103 mining claims — including Cliffs’ flagship $3.3 billion Black Thor chromite deposit — in the region estimated to be worth $50 billion during the height of the commodity boom. Cliffs paid $240 million for the assets in 2009.
The market has since shifted and a lack of concrete movement in talks between First Nations, government and developers has turned many miners off of the 5,000 square kilometre area said to be rich with chromite, copper, zinc, platinum and other valuable metals.
The Ring of Fire was once touted as Canada’s next oilsands, but interest in the area has fallen off and the prospects for development in the remote region, located on First Nations land, have dimmed.
Cliffs decided to suspend its projects in the area in late 2013, citing numerous delays and difficulties that prevented the project from moving ahead. It was also drowning in debt amid a flagging market for commodities. It has shuttered its Toronto office and laid off many of its Canadian employees. In January, the company sought creditor protection for its Bloom Lake iron ore mine in Quebec after failing to find a buyer.
The people of the surrounding Matawa First Nations are ambivalent about the Ring of Fire. They have deep concerns about the impact a new mining region will have on their pristine land, on the animals and fish on which they rely and on their way of life which involves a deep connection to the land.
The area is not accessible by road. Ontario Premier Kathleen Wynne has promised $1 billion to build one.
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