Sudbury smelter plans hinge on Cliffs' stalled chromite project

The future of a ferrochrome smelter in Sudbury is in question after some grim news from Cliffs Natural Resources.

The company announced Wednesday it is temporarily suspending the environmental assessment on its northwestern Ontario chromite project in the James Bay lowlands’ Ring of Fire.

Cliffs points to unfinished agreements with the province and unresolved land rights issues as two of the reasons for the delay.

The vice president of Cliffs Natural Resources overseeing the project said he's frustrated with the lack of progress on the chromite project, which directly affects plans for the smelter.

"When we get the momentum back we'll be moving back again and the furnace will be located in Sudbury," Bill Boor said.

"[But] none of that's settled before we advance beyond these issues."

Sudbury Mayor Marianne Matichuk said she's not surprised Cliffs' environmental assessment has been put on hold, but said she's not worried about the impact this may have on the local economy or jobs.

"There's other plans in place, there are other mines that are opening, there's a lot of activity," she said. "It's the cycle of mining, that's what mining's all about."

The Minister of Northern Development and Mines said the province has yet to sign off on the Sudbury smelter because of the switch in Liberal governments.

"We are very committed to seeing a ferrochrome processing facility in the province and in northern Ontario," Michael Gravelle said.

"So we're going to continue to work closely with Cliffs to try and put those arrangements into a more formal state."

'Political poker'

This "temporary suspension" could be a way for the company to get the provincial government back to the bargaining table, according to one Ontario mining analyst.

Stan Sudol, who’s based in Toronto, said the concerns raised by Cliffs may prompt the province to offer Cliffs a lower hydro rate or help build a subsidized road into the Ring of Fire region.

"This suspension looks a little bit more to deal with specific issues that the new government hasn't had a chance to address," Sudol said.

"Some people might say this is more like a game of political poker and [Cliffs is] trying to get the attention of the provincial government."

The temporary slow-down may be the best thing for both parties, Sudol noted, as it gives Cliffs the chance to ride out the volatility of the minerals market and gives government and First Nations groups more time to deal with economic and social issues.