Noront CEO says company 'has the chops' to pull off Ring of Fire project

The head of a company planning to build a ferrochrome smelter in Sault Ste. Marie says he's confident the project will move forward as planned.

On Tuesday, Noront Resources announced it will build its smelter to process ore from the Ring of Fire in Sault Ste. Marie. The company had narrowed down two locations for the project: Timmins and Sault Ste. Marie.

In response to the announcement, the mayor of Timmins stated "it's not over until it's over."

"We know it will be a number of years before any facilities are built," George Pirie said. "We think that we'll have time to affect the decision. We don't think Noront will be the company that builds the facility. They don't have deep enough pockets required to build it and will have to bring in a bigger partner."

Noront Resources purchased the land claims for the Ring of Fire project from Cliffs Natural Resources in 2015. Previously, Cliffs announced it was planning on building its smelter in Capreol in Greater Sudbury.

Al Coutts, president and CEO Of Noront Resources says a lot has changed since that announcement in 2012.

"It's the same plan going forward [but] we just chose a different location for the ferrochrome plant because we thought that the Capreol plant was too expensive," he said.

"In our case, we're confident because what's happening is the roads and the infrastructure that's getting planned to develop the Ring of Fire has had that much more time to develop."

He adds there are ongoing discussions between the province and nearby communities to plan that road.

As for the ownership of the land claims and financing needed to do the project, Coutts says Noront is different than Cliffs.

"If you do your homework and you look at who owns the debt and equity of Noront you'll find some of the world's biggest companies," he said.

"You'll find resource capital funds, big private equity out of Denver-Colorado. You'll find Franco Nevada. And you'll find Baosteel which is China's biggest steel maker. I think we do have the chops to pull this off."

Initially, four cities in northern Ontario applied to have the smelter built in their community: Sudbury, Thunder Bay, Timmins and Sault Ste. Marie.

Coutts says all the cities submitted good applications.

"Sault Ste. Marie was picked in the end because of its lowest operating costs," he said. "It's on the Great Lakes [and] bringing materials in and out by water is a distinct advantage."

Coutts says he feels the project is moving forward at a good pace, although an agreement on the price of hydro the company will pay is still being negotiated with the province.

"Hydro is going to be a key part of this investment," he said.

"We're in discussions with the ministry and we're expecting to have a long-term power price agreement in place by the time we start construction on the facility."