Ontario’s Ring of Fire may soon get the transportation infrastructure it needs as Liberal Premier Kathleen Wynne recently pledged to spend $1 billion on developing the mineral-rich region in the province’s north. That promise comes as part of a platform for Ontario’s upcoming provincial election, Global News reported.
NDP leader Andrea Horwath also stated during a recent Northern Ontario debate that her party is committed to developing the Ring of Fire.
The pledge from the Liberals is significant in that it deviates from the 2014 budget, according to The Globe and Mail. Though the budget attached a condition of matched federal funding to the project, which involves building a much-needed highway to the Ring of Fire, the Liberals now say they will move ahead with or without federal funding.
“We are making it a priority for my government. We will commit $1-billion with or without the federal government involvement,” the Globe quotes Wynne as saying to a supportive crowd.
The premier said that developing the region would be a boon for Ontario’s economy and expressed her disappointment in the lack of support from Ottawa. “It’s valued at a $60 billion potential so we have to move on it,” she said of the Ring of Fire region, according to Mineweb, “[b]ut we have not seen any indication in the last number of weeks that [Canadian Prime Minister] Stephen Harper is interested in stepping in and making the same kind of support available to the Ring of Fire as he made available to the oilsands.”
However, the National Post stresses that the northern highway will actually cost $2 billion to build, and points out that the Liberals haven’t explained how they will come up with the extra billion should the feds fail to lend their support. Furthermore, the promise lacks a definitive timeline or construction plan, points that have drawn skepticism from some.
As Chromium Investing News has previously explored, Northern Ontario’s Ring of Fire region is a potential hot spot for miners. It holds significant chromite deposits, but its remote location poses a problem in terms of getting mined chromite to market. According to Mineweb, the Ring is estimated to hold one of the top chromite deposits in the world and the first commercial-sized deposit in North America. Those statistics are based on an estimate from Cliffs Natural Resources (NYSE:CLF) that pegs the amount of chromite in the region at 220 million tonnes.
Cliffs Chromite Ontario, an associate of Cliffs Natural Resources, halted operations at its Northern Ontario chromite project in November of last year due to uncertainty over infrastructure development in the Ring of Fire region. At the time, Cliffs affirmed its belief in the potential of the Ring of Fire region and said it remains committed to seeking out solutions with First Nations communities, government and other parties.
The project may still pose a problem for First Nations communities, however; Neskantaga Chief Peter Moonias stated that the area would welcome job creation and economic stimulus from miners, at the same time noting he is concerned about environmental effects and health risks. “Four thousand jobs are important, okay we know that[, but] the lives of the people here that live in the area, about five or six thousand people are also important to consider,” he told CBC News.
For now, it seems chromite miners in the Ring of Fire region will have to wait it out to see if the Liberal government will come up with a plan to make its promises a reality. As Mineweb states, there are still 27 companies with interests in the region.
Securities Disclosure: I, Teresa Matich, hold no investment interest in any companies mentioned in this article.