TORONTO (Reuters) - The government of the Canadian province of Ontario said on Monday it was prepared to spend up to C$1 billion ($900 million)to develop transportation infrastructure in the Ring of Fire, a nascent mining district in the north of the province.
Government support for badly needed infrastructure could revive the fortunes of projects in the remote region, like Cliffs Natural Resources’ (CLF.N) Black Thor chromite project, and those of smaller companies like Noront Resources Ltd (NOT.V) that are focused on the area.
Ontario said it is calling on Canada’s federal government to “equally match” its funding. The province is creating a development corporation for the region.
The 4,000 sq km (1,500 square mile) Ring of Fire is home to rich mineral deposits, and lawmakers say it could bring prosperity to northern Ontario much like the tar sands have to northern Alberta. But the swampy region lacks highways, rail lines or reliable power.
Cleveland-based Cliffs suspended most work on the $3.3 billion Black Thor in June, citing stalled talks with the province and other political and regulatory problems. It has struggled to win over aboriginal communities in the region.
Chromite, used to make stainless steel, is a new commodity for Cliffs, which supplies steelmakers with iron ore and metallurgical coal from its mines in Canada, the United States and Australia.
Noront’s TSX Venture-listed shares rose 9.1 percent to 60 Canadian cents on Monday. Cliffs was down 3.7 percent at $17.33 on the New York Stock Exchange.
($1 = $1.10 Canadian)
Reporting by Allison Martell; Editing by Bernadette Baum