'Risky' time for Cliffs chromite project

It's a risky time for Cliffs Natural Resources' Ontario chromite project now that the company has decided to temporarily suspend its environmental assessment activities, according to an executive with the company.

The company said in a June 12 press release delays at both the provincial and federal level had contributed to the decision.

The project consists of a mine at Cliffs' chromite deposit in the James Bay lowlands region — known as the Ring of Fire — and a $1.8-billion processing facility in Capreol, which was announced with much fanfare in May 2012.

Bill Boor, Cliffs' senior vice-president of global ferroalloys, said the company still expects to locate the smelter in Capreol. That being said, though, the whole project could be in jeopardy if it loses momentum.

“When things slow down, it's very risky for a project like this,” he said.

Boor said Cliffs wanted to be transparent about the fact that it's run out of things it can do to advance the provincial and federal environmental assessment processes.

For the time being, the company won't be proceeding with formalized open houses and preparing drafts for the environmental assessment process.

Boor said he's not sure if or when the company will restart environmental assessment activities, but hopes it will be sooner rather than later.

“I remain optimistic that all of these items can be resolved,” he said. “It's just hard to speculate now about when it will be, because I had hoped they'd already be behind us at this point.”

Boor said he's not sure what the suspension of environmental assessment activities will do to the project's overall timeline. With an original start-up date of 2015, Cliffs said last fall the project could be pushed back to 2017 and beyond.

“I think clearly, whenever we temporarily suspend work, we're now off the schedule,” he said.

Before delays caused the process to grind to a halt, Cliffs had thought it was about a year and a half away from wrapping up the environmental assessment, Boor said.

In terms of the provincial environmental assessment, Cliffs is still trying to get the province to agree to the terms of reference for the process.

“We submitted draft terms of reference last year, and we've gone through several rounds of public comment,” Boor said.

“In my view, it's in the provincial regulator's hands, to decide whether it's adequate. They've had a number of rounds of questions, and I don't think we're in a position to provide much more at this point.”

With the federal environmental assessment, in 2011, the government made a decision about the type of environmental assessment the project should undergo.

However, several First Nations communities applied for a judicial review of the decision.

“Ever since then, we've been talking to the First Nations about how we want to work together to make sure the EA satisfies our needs as well as theirs,” Boor said. “I think we're making progress on that.”

Beyond environmental assessments, Cliffs is also waiting for a decision from the mining and land commissioner on whether it can put a road through another company's land.

Then there's the fact that Cliffs hasn't yet reached a final agreement with the province for breaks on energy prices and what's going to be done about a transportation corridor from the Ring of Fire.

The prorogue of the legislature and leadership changes have caused some understandable delays, Boor said.

“We're hopeful we can get back to the negotiating table and get moving.”

In an email statement released by his office, Northern Development and Mines Minister Michael Gravelle said the province remains committed to seeing “sound, strategic development” in the Ring of Fire.

“Multi-faceted projects, such as that proposed by Cliffs, take a number of years to plan and develop, with many aspects running parallel to each other.”

He said the province's conversations with Cliffs have been “very productive.”

Gravelle said while Cliffs has notified the Ministry of the Environment that it plans to suspend its environmental assessment process, the company has not withdrawn its terms of reference, which remain before the ministry for review.

“We have also made significant progress working with First Nation communities and are currently developing a framework for a community-driven, regional negotiation process, of which Cliffs is certainly supportive,” he said.

“We remain committed to ensuring that all aspects of this development progress in a socially and environmentally sustainable manner.”

Matthew Conway, the press secretary for Tony Clement the federal Minister responsible for the Ring of Fire, also released an email statement about Cliffs' decision.

“This decision was made by a private company,” he said. “Our Conservative government is focused on working with all stakeholders to ensure the potential of the Ring of Fire becomes a reality.

“We will continue to work with all levels of government, First Nations and other stakeholders to help maximize the economic opportunities for Northern Ontarians.”