Is There A Faint Spark for the “Ring of Fire”?

On Friday, November 11, 2016, “Northern Ontario Business” reported that two principals from Noront Resources, the company that now controls most of the chromite deposits in the Ring of Fire, had visited Sault Ste. Marie (https://www.northernontariobusiness.com/regional-news/sault-ste-marie/tom-dodds-new-best-friends-dabble-in-the-ring-of-fire-461986). I have seen this as a very viable option for some time now as that city, which is right on the St. Lawrence Seaway, has a direct rail connection to Nakina, via the former Algoma Central Railway that branches off the CN mainline at Oba.  Nakina by the way is the closest community to which any industrial railway that should be built to serve the Ring of Fire chromite deposits could tie into the CN rail system.

While I have personally tried to lobby interest in a deep water port in Red Rock as a potentially economic means of getting any product to market, if and when the mines finally come on stream I also accepted that this opportunity has a serious flaw. Just prior to the announcement of the discovery of chromite in the Ring of Fire area CN made the business decision to remove all the rail from the Kinghorn Line that connected Thunder Bay with the mainline at Long Lac. It is not an insurmountable challenge as building the right of way and not the actual rail is the most expensive part of building a rail line. But if there is an alternative with higher, but acceptable operating costs, but no capital cost then that may be a better choice.

When Cliff’s had the Black Thor chromite deposit they proposed the base case idea of shipping chromite to Sudbury for processing as Sudbury is also accessible from the CN mainline. This idea, which many even to this day believe, had series flaws. But hey, it was a “base case” – a starting point because it was physically possible. When you start adding economic criteria it falls readily apart. For example once reduced to ferrochrome you still have to ship it to user markets and while rail is cheaper for bulk commodities than road, water is by far cheaper and Sudbury is a long way from any port. Likewise Sudbury does not have access to cheap power. Other weaknesses are present but those two are enough that it really had no hope of ever happening.

Now if you can get the same chromite ore to the Sault you have one of two possible options: use the material directly in the steel plant there so that it now can manufacture stainless steel thus accessing a premium niche market, or put it on boats and send it elsewhere as cheaply as possible. I have heard of the possibility of building a natural gas reduction plant in the Nakina area as, like the CN mainline, this is close to the Trans-Canada gas pipeline and thus forming ferrochrome as early in the supply chain as possible. This would save on additional transportation costs as now the raw ore has been concentrated into a material that can be used directly in the manufacture of stainless steel. If that comes to pass then shipping to the Sault and the possibility of it being used by the steel plant there becomes even more viable.

There are still a lot of unknowns but I see a lot of positives from this article! Now if we can only get the Provincial and Federal Liberal governments to take their heads out of the sand and get the ball rolling again in the Ring of Fire! First by getting an all season road access built close to the site so the mining infrastructure can be built. Maybe then we might finally see the beginning of recovery to the northern Ontario economy!