Cliffs Natural Resources announced that it will suspend its $3.3 billion chromite project in Ontario by the end of the year.
The moves comes despite efforts by the Ontario governments efforts to streamline the project with the creation of development corporation that would develop, construct, finance, operate and maintain infrastructure to support mining development and First Nation communities in the Ring of Fire region (ME, Nov. 11, 2013).
Cliffs cited the risks of developing infrastructure in the remote area of Ontario as the primary reason for the suspension.
All technical project work, including a feasibility study and exploration, is being halted and there is no restart date planned, Cleveland-based Cliffs said in a statement. Offices in Thunder Bay, Ontario, and Toronto will close, it said. The company already suspended environmental-impact assessment activities for the project.
Cliffs’s project was among the most advanced in the Ring of Fire, an area about 400 km (250 miles) northeast of Thunder Bay, which holds deposits of nickel and copper that may be worth between C$30 billion and C$50 billion, the Canadian government said in March. The company’s plans received a setback when the Mining and Lands Commission of Ontario ruled against Cliffs’ proposal for an all-weather road to transport ore that would cross claims of another company in the area, Bloomberg reported.
Cliffs “will not allocate additional capital for the project given the uncertain timeline and risks associated with the development of necessary infrastructure to bring this project online,” the company said in the statement. “Cliffs will continue its work with the Government of Ontario, First Nation communities and other interested parties to explore potential solutions related to the critical issue of infrastructure for the Ring of Fire region.”
Chromite is processed into ferrochrome, an ingredient used to produce stainless steel. Cliffs estimated the project’s total cost at $3.3 billion, including mine development, a processing facility and transportation infrastructure, the company said in January 2012.