Why is Ontario’s Ring of Fire on the Back Burner?

Overview

The ‘Ring of Fire’ is a collection of rich greenstone-hosted chromite (Iron-Chromium Oxide) and nickel-copper-platinum group metal (PGM) deposits around McFaulds Lake in northern Ontario, Canada. Discovered relatively recently in 2007, the region has been hailed in the media as the economic equivalent of Alberta’s oil sands. But although chromite is used as a key ingredient for making stainless steel, development in the area has stalled in recent years due dropping commodity prices and a range of land access and development issues.

The Ontario government estimates the Ring holds $50-billion in chromite and $10-billion in nickel, copper and other metals.

Location, Access and Infrastructure

The 5000 sq km, cresent-shaped Ring of Fire was discovered in 2007 in the James Bay lowlands of northern Ontario, about 540 km northeast of Thunder Bay.

Exploration here is not easy. There are no roads or power and the area is flat and boggy.

The highest ‘peaks’ are eskers – long, sinuous mounds of sediment left behind by glaciers – up to 5m tall.  These glacial sediments, together with peat bogs, lakes and rivers, dominate the landscape. Drilling in the area has shown that these surface sediments can be up to 75m thick.

Exploring the area by foot or vehicle is impossible. Aircraft provide the best access, however rail and hovercraft are being considered as ways to ship cargo in and out of these remote, swampy lowlands, to ports in James Bay 240km to the east.

 Below the Bog: the Geological Story

The Ring of Fire chromite and nickel-copper-PGE deposits are found within the crescent-shaped McFaulds Lake greenstone belt.

This crescent shape is influenced by a huge intrusion of granite to the west. Mapping and interpretation of geophysical surveys suggest that the belt wraps around the intrusion to form a distinctive semi-circular magnetic anomaly dubbed the “Ring of Fire”. And yes, the geologist who named it was a Johnny Cash fan!

This belt is made up of dark-coloured, coarse-grained igneous rocks that are Precambrian in age, about 2,700 million years old. These rocks are low in silica but rich in iron and magnesium and are made of mostly olivine and other dark-coloured high temperature minerals, such as pyroxene.

The rocks in this complex have a distinctive shape below the surface too. They formed as sills: tabular, flat-lying sheets of igneous rock intruded into existing layers in the crust.

Some of the highest concentrations of chromite in the world occur within these sills below the nondescript swamps of northern Ontario.

Some Ring of Fire Explorers

Six geologists and junior mining executives – Richard Nemis, Mac Watson, Frank Smeenk, Neil Novak, John Harvey and Don Hoy – are said to have collectively discovered the Ring of Fire deposits in 2007. Since then, about 30,000 mineral claims have been made by 35 companies over the 5000 sq km area. The area of most intense interest is less than 20km long.

Current companies and projects in the area include: Cliffs Resources (Black Thor, Black Label), Noront (Thunderbird, Eagle’s Nest and surrounding deposits), Probe Mines (Black Creek) and Freewest.

The biggest player in the area is Cleveland-based Cliffs Natural Resources Inc. Last year, Cliffs decided to throw in the towel on the Ring of Fire after failing to reach agreements with key stakeholders including First Nations and the Ontario government. They are currently trying to find a buyer for their chromite assets in northern Ontario and although some of the other area explorers have expressed interest, Cliffs doesn’t seem optimistic that a buyer will be found.

Stakeholder Negotiations

While negotiations between the Ontario government, the Canadian government, resource companies and the eight First Nations communities affected by the development are ongoing, the departure of Cliff’s (and their money) from the process has been a serious set-back for project proponents. While the situation is too complex to explore fully here, suffice it to say that a great deal of infrastructure is required before any development can take place in the region and while each stakeholder hopes to benefit from development, no one seems willing or able to foot the bill.

Coupled with the infrastructure challenges and stakeholder issues, the economic base case is not helped by the fact that chromite is not particularly rare or valuable. It is a mineable commodity to be sure, but the largest current source is from the mines of the Bushveld Complex in South Africa whose primary economic assets are the Platinum Group Metals associated with the Chromite. The market price processed chromite is currently around $2.00 USD/Kg

Further Reading

McFaulds Lake Area Regional Compilation and Bedrock Geology Mapping Project –  Ontario Geological Survey report

Preliminary Results from the McFaulds Lake (“Ring of Fire”) Area Lake Sediment Geochemistry Pilot Study, Northern Ontario – Ontario Geological Survey report

Ring of Fire lights up Northern Ontario’s mining industry – Ontario Business Report

Ring of Fire Exploration – City of Thunder Bay

Hopes for Ontario’s Ring of Fire doused – The Globe and Mail

New Cliffs CEO sees ‘zero hope,’ no asset sale in Ontario’s Ring of Fire – Financial Post

Intention to Develop Business Case for Ring of Fire Rail, Sea Port, and Transportation Corridor on its Homelands – Press Release from Mushkegowuk Council (PDF)