TORONTO – Cliffs Natural Resources is postponing a $3.3 billion project in Ontario, threatening development of the mineral-rich Ring of Fire area once described as Canada’s most-promising mining region.
Cliffs plan to mine chromite, an ingredient for making stainless steel, was among the most advanced in the Ring of Fire, the horseshoe-shaped deposit about 1,000 622 miles northwest of Toronto and named by a mining executive after the Johnny Cash song. Other companies working in the area include Noront Resources and KWG Resources, both headquartered in Toronto.
At stake is development of Northern Ontario, an area about twice the size of California, and projects to mine copper, nickel and chromite. In 2010, former Ontario Premier Dalton McGuinty called the Ring of Fire the most promising mining opportunity in Canada in a century, and Michael Gravelle, the province’s mining minister, values the Ring of Fire’s mineral potential at $57 billion.
Cliffs’ decision is going to have a huge impact on the development of the Ring of Fire, said Michael Mantha, an opposition New Democratic Party member from northern Ontario. The provincial government hasn’t established a clear framework for developing the Ring of Fire. It sends the wrong message to the rest of industry.
Exploration and technical work at Cliffs’ project will stop by the end of the year and company offices will be shut, the Cleveland-based company said in a statement. Cliffs blamed risks associated with the development of necessary infrastructure as metals prices slumped this year and Goldman Sachs Group Inc. forecast declines next year.