Mayor Keith Hobbs said the writing’s been on the wall for a year or more, and the message probably isn’t a good one for Thunder Bay.
Hobbs was reacting Monday to news that Cliffs Natural Resources’ suggestion the mining giant is still working with its best case scenario location for a much-sought after ferrochrome processing plant and it's likely Sudbury will be made the official location.
A decision could come in a matter of weeks.
Hobbs called the decision disappointing, though hasn’t entirely given up hope the project and 500 jobs can be salvaged for Thunder Bay.
“We wouldn’t be surprised by that,” Hobbs said. “The Northwest, NOMA and the City of Thunder Bay, we were all prepared for that.
“When we went to Cliffs last year in Cleveland and met with them, they told us that when they found out the Kinghorn (rail) line was gone, that we dropped from base case to maybe second base case. So it wouldn’t be a surprise if it went to Sudbury at all.”
Andrew Mitchell, a director of development for Cliffs Chromite Ontario Inc., said the final decision will come down to one factor – energy.
“The key driver in the ferrochrome is power costs,” Mitchell said. “That is one of the most significant operating cost components and it’s also one of the things that takes the most in-depth negotiation with the suppliers.
“So that will probably be the key thing we key on. There are other things such as jurisdictions that will factor in as well.”
Mitchell said it is his preference to house the plant, which could be operational by the end of 2015, in Ontario. He also said they’re looking to the province to contribute to the infrastructure costs needed to make the mine feasible.
Hobbs is still holding out hope that the Ring of Fire as a whole can be profitable for the city, noting Noront still has to build a processing plant of its own and is interested in Thunder Bay, adding Cliffs has suggested it might build a runway at the Ring of Fire site and transport miners and other workers to and from Thunder Bay.
“We’re looking at ways to be competitive, still,” Hobbs said. “We’re not giving up this fight. And it is a fight. Sudbury is well-situated, but we have the port, you know, and if that Kinghorn line can somehow get rebuilt, then we’re set.”
The mayor said the first indication Thunder Bay might not be in the running for the processing plant – along with Greenstone, which appears to have been shut out as well – was a year ago when he says Energy Minister Brad Duguid said the province was working on getting 300 megawatts of power to the Sudbury area for the FPF
“I talked to Ron Nelson from NOMA and we both got the impression that Sudbury was going to be it,” he said. “But you know, we still have to wait for these things, you still have to put your best case forward. If you didn’t put a case forward, of course we wouldn’t be in the running for it.”
Mitchell told Thunder Bay Television on Wednesday the U.S.-based company is working hard at the logistics of the location of the ferrochrome processing facility, but they aren’t in a position to officially say anything just yet.
“We’ll be proceeding with a definitive feasibility study … and that will probably take about a year,” Mitchell said.
“The next step for the company would be for the board to approve to spend the money and go ahead and build the project.”
The company has collected a 200-tonne sample of ore and sent it to South Africa for processing.
“That went very well, we had very encouraging results from that testing. The process is consuming less power than we thought and it’s producing an exceptional product,” Mitchell said, addng diamond drilling suggests the chromium deposit is even larger than first believed.
The mine should last at least 30 years, he said, but could be extended as long as a century.
