Nov 20 (Reuters) - Cliffs Natural Resources Inc said it would indefinitely suspend a $3.3 billion chromite-mining project in Canada by year-end, snubbing out faint hopes that the struggling development might be able to get back on track.
The U.S. mining company had said in June that it was putting the project on ice due to stalled talks with the Ontario provincial government and on other political and regulatory problems. At that stage, there were still hopes the Black Thor project could be revived.
The cancellation of the development comes as Cliffs and other miners look to cut costs in the face of low iron ore prices, and deals a severe blow to plans to develop northwestern Ontario’s mineral-rich Ring of Fire region.
The company said it would reduce staff related to the project, closing the exploration camp site, along with its Thunder Bay and Toronto offices. It did not disclose the number of people affected.
Citing an unsure timeline and risks associated with developing infrastructure, Cleveland-based Cliffs said it would not be allocating additional capital to the development.
Chromite is refined into ferrochrome, used to make stainless steel. Cliffs has touted the mineral as a natural next step for a company with long experience supplying the steel industry.
The Ring of Fire, about 1,500 km (1,000 miles) northwest of Toronto, is a large cluster of mineral deposits that Canadian political leaders have said could bring economic development to northern Ontario much as oil sands have to northern Alberta.
There are no rail lines, highways or reliable power sources in the region, and Cliffs’ plan for Black Thor included a $600 million highway that could open the zone to smaller mining companies.
The company’s shares closed at $27.23 on Wednesday on the New York Stock Exchange. They have risen 54 percent since it first said it was suspending work on the project in June.