During the company's fourth-quarter conference call on Feb. 13, Cliffs chairman Joseph Carrabba said while the project timelines for Black Thor are on schedule, other “critical elements” are beyond the company's control.
“Last May, we signed a term sheet with the province that among other things enabled the decision to locate the furnace operation in (Sudbury) Ontario," said Carrabba.
“While negotiations of a binding agreement with the government have slowed and dialogue has been suspended during the provincial government transition, recent conversations with newly seated cabinet minister Gravelle indicates the province is committed to get a deal done."
The Ontario government has said precious little since that May news conference in Sudbury when then-mines minister Rick Bartolucci announced Cliffs was locating the $1.8-billion ferrochrome smelter in the city as part of the Cleveland miner's larger $3.3-billion mines and mill investment in Ontario.
But the province has not publicly revealed any details of those project-critical issues such as delivering a power rate that Cliffs can live with, and divulging what it is prepared to spend on an ore haul road or railway into the James Bay lowlands.
Cliffs has hinted that development of Black Thor could be put off until 2017 or beyond, but is officially shooting for a 2016 mine startup.
“It's imperative, however, that the right deal is completed for both Cliffs and Ontario even if it delays our previous project schedule,” said Carrabba. “We remain prepared to resume the discussions with Ontario's new leadership and its position."
Cliffs intends to spend $60 million this year to complete a feasibility study of Black Thor, but Carrabba said that could change.
“In light of our stalled dialogue with the government, we are evaluating adjustments in our spending rate which could impact the amount we invest in this project during 2013 and the project's overall schedule.
"While we remain enthusiastic about this opportunity, we cannot predict how quickly the definite agreements will be in place allowing the project to continue and until the feasibility phase is complete, we will not speculate on the overall project schedule.”
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