Risk and reward beckon in Canada's Ring of Fire

Fri May 25, 2012 4:23am EDT
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By Julie Gordon and Bhaswati Mukhopadhyay

(Reuters) - A $3.3 billion plan to build North America's first major chromite mine deep in the Canadian wilderness promises to usher in an era of prosperity for the region's aboriginals and generate millions of tax dollars over its lifetime.

Tucked deep into northern Ontario, the Ring of Fire contains rich mineral deposits that could transform the region much as the oil sands have transformed Alberta. Much like the oil sands, it has raised deep environmental and social concerns.

But the Ring of Fire stands apart from other resource mega-developments around the world in one important respect. Rather than oil, gold or iron ore, its main attraction is a relatively minor ore - chromite - which is refined into ferrochrome to make stainless steel.

The region contains North America's only known large-scale chromite deposit. If Cleveland-based Cliffs Natural Resources Inc develops the Black Thor project, it will likely revolutionize the stainless steel industry on the continent, which now relies on imports from South Africa and Kazakhstan. It would make Canada the world's fourth-largest chromite producer.

Black Thor is the first of many projects that could keep the Ring of Fire bustling with drills, crushers and dump trucks well into the next century - until the deposits run dry.

"We've got a whole bunch of projects and you could have an enormous boom that ends in an enormous bust," said Bob Gibson, an expert on environmental policy at the University of Waterloo in Waterloo, Ontario.

Rapid urbanization in China, India and other developing nations has driven up demand for base metals such as copper, nickel, iron ore and chromite, used to build everything from skyscrapers to household appliances.

At the same time, centuries of exploitation have made it harder to find viable projects in politically stable regions, forcing miners to develop ever-more remote resources.   Continued...