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Cliffs’ Black Thor plans in flux, executive says

Keywords: Tags  William Boor, Cliffs, ferrochrome, Black Thor, Michael Gravelle, chromite, Thorsten Schier


NEW YORK — Cliffs Natural Resources Inc. has no clear timeline on when the permitting process for its Black Thor ferrochrome project in northern Ontario will resume following a change in local government, but the company still sees enthusiasm from all involved parties to develop the mammoth project.

"We don’t have a schedule for when other people are going to get back in the boat and row with us," William C. Boor, senior vice president of global ferroalloys for the Cleveland-based company, told AMM, but the most recently announced start-up date of 2016 ( amm.com, Sept. 28) likely was not feasible.

The company "would love to have gotten a deal done before the change (in government) took place," but Cliffs is currently in the midst of familiarizing the new administration—which so far has shown enthusiasm—with the project, Boor said.

Michael Gravelle, Ontario’s Minister of Northern Development and Mines, told AMM recently that although the government is in a transition period, it is committed to "seeing mineral development in the Ring of Fire" ( amm.com, April 26).

Cliffs still expects to complete an internal study on the project by the end of this year, but the permitting timeline remains dependent on negotiations with the government and First Nations groups in the area.

"We’ll be patient and we’ll do it the right way. Our interest is to develop, own and operate this mine for decades. We want the relationships to be solid," Boor said, adding that the permitting process has been more challenging than expected. "The fact that the parties want it so much made me think we would achieve alignment quicker."

The company still firmly believes in Black Thor’s potential as a top global producer of ferrochrome. "We still are convinced we’ll be a best-quartile cost producer," Boor said.

The mine is expected to yield about 1.1 million tonnes of chrome ore and 560,000 tonnes of high-carbon ferrochrome annually, with production costs expected to be around $200 per tonne for chrome ore and 70 cents per pound for ferrochrome, according to a company presentation.

High-carbon ferrochrome in the domestic market is currently trading at between $1 and $1.03 per pound.

Cliffs expects ferrochrome prices to rise as production costs in South Africa, the world’s largest producer, continue to trend upward due to higher power and labor costs. "We expect the longer-term (and) even the mid-term pricing to be a lot higher than it is right now," Boor said.

Once permitting is complete, construction of Black Thor likely will take between two and two-and-a-half years, Boor said.


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