Bill Boor, Cliffs Natural Resources president of ferroalloys.
The company has set aside $60 million to complete its feasibility study of its proposed open pit mine, roughly 500 kilometres northeast of Thunder Bay.
“I can’t really go to the board of directors and to ask them to move out of the feasibility phase of the project until we’ve wrapped up some of these uncertainties,” said Bill Boor, Cliffs’ president of ferroalloys.
While Boor remained confident the feasibility study will be wrapped up as planned by late summer, some next-phase construction moves may be put on hold.
“What’s possible is we might demobilize some of that effort and not be prepared to move into execution at the end of feasibilty.”
Boor echoed what Cliffs chairman Joseph Carrabba said in a mid-Febuary conference call to analysts, that the company is evaluating whether to reduce this year’s project spending, which could impact the overall schedule, due to its “stalled dialogue” with Queen’s Park.
“What’s at risk is the momentum and how quickly we move on to the next phases of the project,” said Boor. “We might not be able to if we cut back on our spending, and the spending doesn’t make sense if we don’t have some things resolved.”
Soon after Cliffs and the Ontario government signed a term sheet last May that named Sudbury as the site for the company’s ferrochrome processor – in agreeing to the government’s insistence that the smelter stay in Ontario – negotiations got immediately underway to resolve some project-critical issues.
Among the issues to be checked off are an industry-friendly power pricing agreement that’s comparable with Manitoba and Quebec rates, and a plan on how the province intends to proceed on the transportation infrastructure to haul chromite ore out of the James Bay region by either road or rail.
“Since May both sides have been working hard but we just haven’t gotten it done,” said Boor. “Now we find ourselves in a transition period with a new (provincial) administration coming in.”
Boor said there must be a “clear path” made to build infrastructure, which includes access to surface rights and achieving results with First Nation communities on hotly-tested issues such as the project’s environmental assessment.
Cliffs is now a prisoner to provincial politics.
Should the Liberals’ spring budget be voted down in a non-confidence vote, the outcome of an election could mean Cliffs could be starting negotiations from scratch with an entirely new government.
“That’s absolutely a risk,” said Boor. “We pushed hard to try and resolve it with the previous administration. We’re anxious to try and wrap it up with this one for that very reason.”
Boor held out hope that a reshuffled provincial cabinet and the arrival of Treasury Board president Tony Clement in taking over the federal end of the Ring of Fire file could regain some lost momentum.
In his recent remarks to the Thunder Bay Chamber of Commerce, Clement said he intends to bring the full weight of Ottawa to tackle the development’s complex issues.
Clement delivered some jabs that the outgoing McGuinty government had let the development become “stalled and become mired in paralysis and uncertainty.”
Boor said he’s encouraged by those comments and is pleased that Clement and the federal government have joined the fray.
”I’m very anxious to sit down and talk with him.”
At Queen’s Park, Cliffs will be dealing with a familiar face in Michael Gravelle, who’s back at the helm of the Ministry of Northern Development and Mines (MNDM). The Thunder Bay-Superior North MPP held that post from 2007 to 2011 when the chromite project was in its grassroots stages.
“I’m thrilled that he’s back at MNDM because it’s a critical position to help us get through this,” said Boor.
Whether a shuffling of cabinet means Cliffs will be dealing with a change in provincial negotiators has yet to be determined.
“I’m going to have to sit down with Minister Gravelle and talk about where we go from here. And part of that is getting different people in the new administration up to speed on what’s taken place to date because a lot of the faces have changed,” said Boor.
“We’re encouraged by the interest that the current administration has, but we need to get it done. If we don’t the project has a real risk of stalling for a while.”