Cliffs on course for 2016?

• Author: Ross, Ian
• Position: MINING

The timelines for Cliffs Natural Resources to develop a chromite mining project in the James Bay lowlands still remain somewhat murky. Bill Boor, Cliffs' senior vice-president of global ferroalloys, spoke to a Sudbury Chamber of Commerce lunchtime crowd in early November to outline progress on the massive $3.3-billion Black Thor mine and Capreol furnace project, and also to tamp down reports that the Ohio miner's development timelines are slipping by one year.

Boor maintains that the company is still shooting for a late-2016 startup for mining operations, despite earlier comments by his CEO, Joseph Carrabba, that cost pressures and volatile markets could push back the startup of production to 2017.

"My simple answer is, it depends," said Boor on the project scheduling. "A lot of things have to go right for this to happen."

In an Oct. 25 third-quarter conference call with analysts, Carrabba said the company is curbing capital spending and is holding off on early site construction at the remote location in the so-called Ring of Fire until a detailed feasibility study is finished next summer.

While Cliffs believes Black Thor has great long-term potential, Carrabba said uncertain global economics and volatile commodity prices, particular the sharp decline in prices of iron ore--Cliffs' bread and butter commodity--have the company taking a serious re-evaluation of the project in its 2013 business plan.

"This includes delaying the major capital spending outlays and could push the production target date beyond 2017," Carrabba told analysts.

In an interview, Boor categorized Carrabba's comments as a "misstatement" that were later clarified.

Key challenges remain for Cliffs in striking a power agreement with Ontario, developing better relations with First Nations in the Far North, and sourcing the capital to invest in vital transportation infrastructure.

"Right now, the target remains 2016 and it's a schedule that's got some risk of slippage," Boor told the crowd.

Cliffs' plan is to truck chromite 330 kilometres down an all-weather road from the Ring of Fire to a transload facility on the main Canadian National Railway line at Greenstone in northwestern Ontario. About 1.1 million annual tonnes of concentrate will head west to China while 1.2 million tonnes of chromite heads east to Sudbury where a ferrochrome smelter will be built in Capreol.

Boor said as world demand for ferrochrome, used in stainless steel production, grows, the Capreol plant...