* Ring of Fire chromite project moves to feasibility stage
* Ferrochrome processing plant to built in Sudbury area
* Major capital spend for $3.3 bln build expected in 2014,
* Province eyes north-south road between mine, Sudbury
By Julie Gordon
TORONTO, May 9 Cliffs Natural Resources Inc
said on Wednesday that its board approved plans to
conduct a feasibility study for its proposed $3.3 billion
chromite project in the Ring of Fire region of Northern Ontario.
The Cleveland-based miner also announced plans to build a
ferrochrome processing facility in Sudbury, a nickel mining hub
that is home to major Xstrata Plc and Vale Sa
Morningstar analyst Daniel Rohr said the project would make
Cliffs one of the largest chromite producers in the world. The
company estimates it will produce of some 600,000 tons of
ferrochrome a year and 1 million tons of chromite concentrate
South Africa, Kazakhstan and India are top global producers
of the metal, a key ingredient in stainless steel.
Cliffs did not say when it expects to complete the
feasibility study, but said it expects the majority of capital
spending for the project to occur in 2014 and 2015. Its stock
was slightly higher at $56.96 on the New York Stock Exchange.
The company will not make a final decision until it has both
environmental approvals and agreements with aboriginal groups.
The mine has the potential to open up the Ring of Fire, a
remote swath of mineral-rich land some 1,500 kilometers (900
miles) northwest of Toronto, to development. Numerous small
mining companies are exploring metal deposits in the region.
"Ontario is very committed to ensuring this development and
recognizes it will be opening up that part of Ontario to future
development and opportunities," the province's Ring of Fire
coordinator Christine Kaszycki told Reuters.
But a serious lack of infrastructure in the region will be
major hurdle. Developers must likely build hundreds of miles of
all-season road south to a highway to Sudbury, along with power
and other basic infrastructure.
Cliffs said it is working with the province to address the
Some analysts worried that overall development costs, which
have already more than tripled to $3.3 billion from an earlier
estimate of $1 billion, could rise further.
"I don't expect this to be a $6 billion project, but I think
you could certainly see further cost pressures of probably 10 to
20 percent above current levels, just based on what we're seeing
with other projects," said Dahlman Rose analyst Anthony Young.
Ontario has backed the development, which it expects to
create some 750 mining, milling and transportation jobs, plus up
to 450 jobs at the ferrochrome processing facility.