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Plan wouldn't cost taxpayers a dime: KWG

By: Jonathan Migneault - Sudbury Northern Life

 | Jun 04, 2014 - 1:43 PM |
KWG says a rail line is the best choice for a transportation corridor in and out of the Ring of Fire. File photo.

KWG says a rail line is the best choice for a transportation corridor in and out of the Ring of Fire. File photo.

Ontario Northland key to opening Ring of Fire

A plan by KWG Resources to extend rail infrastructure to the Ring of Fire would not cost taxpayers a cent, said the company's vice-president of exploration and development, Moe Lavigne.

“That's very doable,” Lavigne said. “There are a lot of people who love to invest in infrastructure. There's no reason to reach into the taxpayers' pockets for that.”

The company has taken to social media to reach out to the electorate with its proposed plan to hand Ontario Northland the reins for development in the Ring of Fire chromite deposit.

“Ontario Northland was created to develop northeastern Ontario, which it did,” Lavigne said. “This is really an extension of the reason why it was put into existence in the first place.”

Under KWG's proposed plan Ontario Northland would become the development corporation for the Ring of Fire and issue bonds to raise capital for a railroad to the remote region of northwestern Ontario.

The Toronto-based junior miner holds a narrow string of mining claims in the Ring of Fire extending almost 330 kilometres into its Big Daddy chromite deposit.

Through its own privately financed study, KWG has estimated a north-south railroad to their Ring of Fire deposits would cost $1.55 billion to build, while a road along the same route would cost $1.05 billion.

But the lower operational costs for a rail line would bring a return on investment of the initial capital expenditure within six years, Lavigne said. A road would cost $60.78 to transport a tonne of ore, while a rail line would cost $10.50.

The company's plan was outlined in a two-page ad it had published in the May 24 edition of the Globe and Mail.

The more recent social media campaign is meant to convince the electorate — especially in vote-rich southern Ontario — that Ontario Northland is the best option to lead infrastructure development in the Ring of Fire.

“If we put this on the people's radar screen it will end up on the politicians' radar screen,” Lavigne said.

As for which political party is best suited to develop the Ring of Fire, Lavigne said he and his company no longer have faith in the Liberals.

“Seeing that the Liberal government is conflicted at the moment, I would say that we stand a better chance of pushing the Ring of Fire development forward by having one of the other parties in government,” he said.

He said the Liberal Party is conflicted because it enacted the Far North Act, which protects at least 225,000 square kilometres of boreal forest, or around 21 per cent of Ontario's land mass, from development.

Several First Nations leaders demanded the bill be scrapped when it was enacted in 2010. They said it violated their treaty rights and gave them no say on how their land would be developed.

Progressive Conservative leader Tim Hudak said his party will repeal the Far North Act if it wins the June 12 provincial election.

Lavigne added the Liberal government also tried to sell Ontario Northland two years ago, but recently reversed that decision. The Crown corporation remains in public hands and largely intact, save for its telecommunications arm which is being sold to Bell Aliant.

KWG's rocky relationship with the provincial government stems in part from the province's support of mining giant Cliffs Natural Resources in its legal action against KWG.

KWG and Cliffs were development partners in the Ring at one time, but had a falling out. Later, when Cliffs approached KWG to gain access to its transportation corridor, KWG refused and the matter went to the Ontario Mining and Lands Commissioner.

The tribunal ruled against Cliffs, which later filed a court appeal, with a hearing scheduled June 16 and 17. The provincial government has requested to weigh in on the appeal.

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Jonathan Migneault

Jonathan Migneault

Staff Writer


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