The so-called Ring of Fire north of Thunder Bay could generate billions of dollars of revenue.HANDOUT/Reuters
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If not Cliffs, then who?
The question is of paramount importance to Ontario's economic future, and comes with no obvious answer. Mining the chromite deposits of the so-called Ring of Fire north of Thunder Bay is supposed to generate billions of dollars of revenue, and create thousands of jobs. But with the Ohio-based company having scrapped plans to develop it, nobody else is poised to step in.
It's a dilemma that Kathleen Wynne's Liberals have surely been contemplating for months already.
In retrospect, it's apparent that both Cliffs Natural Resources Inc. and the government had a strong inkling this day was coming, and were each doing their best to make the other side wear the bad news.
For Cliffs, that meant mounting a case that the province wasn't doing enough to remove the myriad barriers to getting work under way. Never mind that the company's finances took a nosedive in recent years, because it bet heavily on iron ore just before commodity prices tanked, and that its incoming CEO was rumoured to be unenthused by the prospect of making a big investment in a mineral Cliffs has no experience mining.
It was raring and ready to go, if only the province would move more swiftly to get First Nations on board, invest in needed infrastructure, and in particular help resolve a dispute with another company that bought up a piece of land through which Cliffs needed to build a road.
From the province, of late, there were showy gestures aimed at demonstrating that it was going out of its way to make the project work. Never mind that for at least a year after a framework deal with Cliffs was announced in May of 2012, a period when there was a change in premier, there was a noticeable lull.
Making up for lost time, it launched a new northern development corporation supposed to kick-start investment and bring all key players to the table.
Although that corporation was long in the works, it was clearly rushed out a couple of weeks ago, with the government unable to provide many details on how it would be structured. In a best-case scenario, the announcement might have persuaded Cliffs not to pull the plug; otherwise, it was seemingly about winning the PR battle.
The outcome of that battle is probably of greater consequence to the government than to Cliffs. That's partly because, unlike a private business, the Liberals will have to face voters – not least in Thunder Bay and Sudbury, where a new smelting plant was to be built. But it's also because the government will have to try to persuade some other mining company to take the leap of faith from which Cliffs has backed away.
That's a tall task to begin with, because there are a limited number of companies big enough to take this on, and fewer still have experience with chromite that could draw them. There is also the small problem that Cliffs still has title to the chromite deposits, and could drive a tough bargain for it. So the last thing the province needs is for impressions to take hold that there are too many obstacles to this project on top of that, and not enough political will to overcome them.
There will no doubt be much made of the fact that another company, Noront Resources, appears to be moving full steam ahead with plans to mine nickel and other minerals in which the Ring of Fire is also rich. Indeed, there could be billions of dollars just in that.
But it was chromite that was supposed to really put Ontario in the natural-resources game, back when the government had a partner to play with.
Adam Radwanski is The Globe's Ontario politics columnist based in Ottawa
Adam Radwanski