KWG Resources sees a bright future for the Ring of Fire and believes the best way to reach that future is on iron rails.
KWG is an original player in the Ring, a large deposit of chromite and other metals in the mineral-rich James Bay Lowlands, about 500 kilometres north of Thunder Bay. In 2006, the company took part in the first major discovery of chromite, a key component in making stainless steel.
“We came to the realization that the biggest consumers of chromium on the planet are the Chinese stainless steel makers,” said Moe Lavigne, KWG’s vice-president of exploration and development. In the chromite-chromium-ferrochrome industry, the metals are exchanged under offtake agreements, between the resource producer and the buyer, rather than in an open market like nickel, copper and gold.
“To be able to proceed and put something into production, to introduce more of the commodity into the market, you need to have an agreement with the purchaser in place first,” Lavigne said. “So since the beginning, we have been talking to people in China about trying to establish this and there were no takers and China seemed to be sort of aloof about the whole thing.”
That changed after Cliffs Natural Resources, an American company and formerly a major player in the Ring, opted to pull out of the region. About six months later, one of China Railway’s engineering divisions contacted KWG about completing a feasibility study and building the railroad itself.
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