There was an article published recently in the Northern Life (Sudbury.com) where Allan Coutts was quoted on a few topics during a visit to Timmins. In this article, I found one line quite interesting. (Click here to read the entire article)
There are three key factors he said have to be right: the site, the commercial agreement with the current owner of the site, and the partnership with the city.
It’s interesting that the only three factors are ‘the site, the commercial agreement […] and the partnership with the city.’ What I don’t see as being important are the environmental impacts and social licenses. Keep that in mind.
Other quotes to dissect are.
Wherever the smelter is built, during construction, he said there will be about 500 people involved. Once it’s operating, it will mean between 300 and 350 fulltime jobs.
The argument for ‘jobs’ is an interesting fact, when we see the number of jobs seems to change with every article written about this plant. Think of how far technology has gone and will be in ten years. Then comparing other similar facilities which operate with less staff than these projected numbers I find it really interesting that these numbers are floating around and seem to be so dynamic.
Once it is up and running, he said there is enough ore to run for more than 100 years.
This is another one I hear often. I don’t question that there are 100 years of ore in the Ring of Fire. I do however question the economic viability of that ore. No major mining conglomerate cares about it at this point. Cliffs invested billions in its operations in Canada and produced zero profits. Everyone in Sudbury, including the mayor and other City officials claim they went bankrupt. The company, whose stock soared 10% after abandoning it’s Canadian projects and seeking creditor protection on only its Canadian Operations also saw a 432.3% stock growth. To put it in perspective. In that same time, market leaders $VALE saw a 131% gain while $RIO and $BHP saw investor returns of 32% and 38%.
It’s clear that the street and worldwide conglomerates have spoken about the ring of fire. Instead, Ontario and Canadian taxpayers will pay $1b in public money to pave a road for a Junior Miner outfit with a market cap worth $120m. To put that in perspective, Cliffs has a market capitalization of $2.7b. Vale, $282b, Glencore $55b.
Note that Glencore produces about 2 hundred million tons of ferrochrome a year and has been active in ferrochrome acquisitions in recent years. It’s clear they don’t see any viability of the Ring of Fire.
What appears to be happening here, is that Noront is trying to leverage the Ring of Fire’s “ferrochrome” potentially inflated information in order to get a road that will get their Nickel ore out of the Eagles Nest camp and potentially other Nickel sites. This would lower the cost of their Nickel transportation positioning themselves to make a good profit on that metal as it’s suspected to sore in prices by 2020 when it’s projected that by then, Lithium Ion batteries will be made up of 80% Nickel. This one is already going to be smelted in Sudbury.
I’m not quite sure where the other Billion dollars will come from to build the ferrochrome processing facility, I suspect again, from subsidies and more public money. This makes me question the entire economic viability with so much public money and public assistance as the stake to run such a facility.
What I do know however is that Northern Ontario will be short 70 000 skilled workers as our aging workforce continues to retire. There is, will be no shortage of skilled labor JOBS in Northern Ontario. Two billion dollars of public money could create far more than ‘300 to 350 jobs’ in other sectors. Canadian expansion from Amazon, Samsung is creating thousands of jobs, we need to start investing in attracting and retaining talent in the north.