THUNDER BAY, ON --- May 10, 2012 --- Cliffs Natural Resources has announced a $3.3-billion investment to build a chromite mine, transportation corridor and processing facility in Northern Ontario’s Ring of Fire that would lead to a new generation of prosperity in the north, with thousands of jobs and new infrastructure.
The Ring of Fire represents one of the most significant mineral regions in the province, and
includes the largest deposit of chromite ever discovered in North America. The chromite found
in this area, 540 kilometres northeast of Thunder Bay, is a key ingredient used to create
Cliffs Natural Resources has announced it intends to build a $1.8-billion chromite processing
facility in Capreol, near Sudbury. This would employ 450 people during construction, and as
many as 450 people when the facility is in operation. Mine and mill development, as well as the
construction and operation of transportation infrastructure, could create an additional 750 jobs,
plus hundreds of indirect employment opportunities for Northern Ontarians and First Nations’
Ontario will work closely with First Nations to ensure they are partners in this development. The
province is committing to a First Nations dialogue focusing on long-term environmental
monitoring, socioeconomic and community development, regional infrastructure and resource
revenue sharing. Ontario is calling on the federal government to work with Ontario and First
Nations’ communities to advance the project.
Discussions will also begin on the proposed development of a new all-season road to run south
from the Ring of Fire through northwestern Ontario.
Ontario is committed to rigorous environmental standards for the development of the Ring of
Fire. The federal and provincial governments are co-ordinating environmental assessments of
the proposed processing facility, transportation corridor and mine site developments. The
government is committed to ensuring that the Crown’s duty to consult is met throughout the
Ring of Fire development.
This is another example of the growing investment in Ontario’s mineral sector. Mineral
exploration investments in the province surpassed $1 billion for the first time last year and new
capital investments by the mining sector in 2011 exceeded $3 billion, driving economic activity
and creating jobs.
Cliffs Natural Resources Inc. announced today that the Company's Board of Directors approved advancing its proposed chromite project, located in the Ring of Fire area of Northern Ontario, Canada, from pre-feasibility to the feasibility study phase. The Company's feasibility study will build further on the technical and economic evaluations and a clearly defined project description will enable environmental assessment to move forward.
Cliffs stated that its discussions with the Government of Ontario have resulted in an agreement in principle for key elements of its chromite project, including development of provincial infrastructure. The Company is satisfied and confident in naming Ontario as the future location for its intended ferrochrome processing facility. Both parties will continue to work toward a definitive agreement.
Cliffs also said that, after a lengthy and careful evaluation process, which included several alternative locations, it selected Sudbury, Ontario as its future ferrochrome processing facility site. This facility will be designed to process the chromite ore mined and concentrated in the region. Sudbury was selected due to various economic and technical factors that would best support the viability and success of the overall project, including transportation logistics, labor, long mining tradition, community support and access to electrical power.
Bill Boor, senior vice president - global ferroalloys for Cliffs, said, "Today's decision is a major milestone in our overall plan and adds more clarity to the project. Now, we are able to commit to a project definition, moving us closer to making the chromite project reality. By following a very rigorous and disciplined pre-feasibility approach, we are confident that the viability of the project is enhanced, which is critical to creating stable jobs and bringing other social and economic benefits to the region."
Before Cliffs can make a final decision on the project in its entirety, the Company must receive provincial and federal environmental assessment approvals, negotiate mutually acceptable agreements with affected First Nations communities, work with governments to address the lack of infrastructure in the Ring of Fire and complete its commercial and technical feasibility studies.
"We will continue our work to meet all of the requirements of the environmental assessment process as well as the expectations of the First Nations and local communities, especially with regards to the social, environmental, and economic performance of this project should it proceed," said Boor.
Boor added, "We are very excited about the potential impact of this project for all of Northern Ontario. Assuming it goes ahead, our project has sufficient scale to justify infrastructure investments with the potential to connect remote communities with more populous municipalities, opening up the Ring of Fire to other responsible mining investments."
As previously disclosed, Cliffs indicated that, although it believes the chromite deposits it controls are world-class, a number of additional studies, including feasibility, and other project milestones need to be completed before the Company begins allocating a significant portion of capital to the project's construction. Based on the completion of these studies, Cliffs anticipates a majority of the project's anticipated capital requirements would be made in 2014 and 2015, with an early works program initiated prior to 2014 to maintain project execution timeline.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is an international mining and natural resources company. A member of the S&P 500 Index, the Company is a major global iron ore producer and a significant producer of high- and low-volatile metallurgical coal. Cliffs' strategy is to continually achieve greater scale and diversification in the mining industry through a focus on serving the world's largest and fastest growing steel markets. Driven by the core values of social, environmental and capital stewardship, Cliffs associates across the globe endeavor to provide all stakeholders operating and financial transparency.
The Company is organized through a global commercial group responsible for sales and delivery of Cliffs products and a global operations group responsible for the production of the minerals the Company markets. Cliffs operates iron ore and coal mines in North America and two iron ore mining complexes in Western Australia. The Company also has a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. In addition, Cliffs has a major chromite project, in the feasibility stage of development, located in Ontario, Canada.
News releases and other information on the Company are available on the Internet at: http://www.cliffsnaturalresources.com
This release contains "forward-looking" statements within the safe harbor protections of the federal securities laws. Specifically, this material contains forward-looking statements regarding the Company's proposed development of its Black Thor deposit and related mining, or processing, transportation and production infrastructure. Although the Company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risk and uncertainties relating to Cliffs' operations and business environment that are difficult to predict and may be beyond Cliffs' control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by forward-looking statements for a variety of reasons including: the uncertainty or weakness in global economic and/or market conditions; trends affecting our financial condition, results of operations or future prospects, particularly any slowing of the economic growth rate in China for an extended period; the ability to successfully integrate acquired companies and achieve post-acquisition synergies, including without limitation, Consolidated Thompson; the outcome of any contractual disputes with our customers, joint venture partners or significant suppliers of energy, materials or services or any other litigation or arbitration; changes in the sales volume or mix; our ability to successfully identify and consummate any strategic investments; the failure of plant, equipment or processes to operate as anticipated; unanticipated downturns in business relationships with customers or their purchases from us; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets; the results of pre-feasibility and feasibility studies in relation to projects; impacts of increasing governmental regulation, including failure to receive or maintain required environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity; the ability to achieve planned production rates or levels; our actual economic ore reserves or reductions in current resource estimates; adverse changes in currency values, currency exchange rates and interest rates; the ability to maintain adequate liquidity and successfully implement our financing plans; availability of capital equipment and component parts; risks related to international operations; and problems or uncertainties with productivity, third-party contractors, unanticipated geological conditions, weather conditions, natural disasters, tons mined, changes in cost factors, the supply or price of energy, transportation, mine-closure obligations and employee benefit costs and other risks of the mining industry; and other factors and risks that are set forth in the Company's most recently filed reports with the Securities and Exchange Commission. The information contained herein speaks as of the date of this release and may be superseded by subsequent events. Except as may be required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in this release.