Sault Ste. Marie officials have confidence in their submission
SAULT STE. MARIE – Negotiations are continuing between Noront Resources and Algoma to determine whether an agreement can be reached that would see the development of a ferrochrome facility on the steelmaker’s property.
The key now is for Noront to complete its due diligence to determine how a production facility would be situated on the Algoma property site. It also needs to determine what shared services it can cobble with Algoma and determine what the strategic advantages would be to do that.
NorOnt president and CEO Alan Coutts said both the Sault Ste. Marie and Timmins locations have really good sites and supportive municipalities.
The decision will hinge on the commercial arrangement that can be negotiated with the property owners, Coutts said in a telephone interview.
He said Noront has spoken to the secured creditors and that team has encouraged talks to continue with Algoma’s management team.
Similar steps have been taken in Timmins with the Glencore management group.
“At this point we are putting together some engineering drawings which will allow us to theoretically locate the plant on site, which will allow us to talk to the ownership teams about specific infrastructures that we can repurpose, or share,” he said.
Technical teams are expected to visit the Sault in September to meet with Algoma’s management team, he said.
Coutts said Noront is not favoring any one site at this point in time.
Mayor Christian Provenzano says he checks in with both Noront and Algoma’s executives regularly to see how discussions are going and if he can be of any assistance.
Sault Ste. Marie’s Economic Development Corp. director of business Dan Hollingsworth is doing the same from a staff perspective and Sault MPP Ross Romano is also keeping tabs on the situation from a provincial standpoint.
Provenzano said he’s positive that strategic advantages with shared services will be noted in Noront’s final analysis but it will take some time for the parties to determine how that will work.
Earlier this summer it was announced that Sault Ste. Marie and Timmins are the two communities that have been shortlisted by Noront Resources to host a ferrochrome facility in their community.
Additional due diligence from the city’s original proposals is now taking place.
Timmins has identified the Kidd Metallurgical Site as its preferred location for the plant. Currently, there is an active concentrator on site set to close in 2022 and officials there believe that the site could transition to Noront.
The difference is that the Timmins site is partially closed down now and expects to wrap up its current operations in the coming years where as Algoma’s site is active.
“Working out a longer-term relationship is important because we hope to have this plant operational for 50 to 100 years,” Coutts said. “We need to have a long-term view of what this agreement will look like and that takes a little bit of time.”
Noront hopes to make a decision by year end.
After the first phase of the process, both Sudbury and Thunder Bay were eliminated from the selection process.
While Sudbury had the lowest operating cost, it included significant capital costs such as site preparation earthworks and reestablishment of critical infrastructure. It also faced strong opposition from the local community.
Thunder Bay had the community support but a water body transecting the property reduced the environmental acceptability of the site and costly power infrastructure needs were also identifies as a potential issue.
The Sault Ste. Marie team has argued that the city’s advantage is the size of the brownfield site, which is also equipped with the necessary infrastructure and close to all transportation routes, including water, rail, road and the international border.
The city’s ability to provide a skilled workforce and the cost of creating a plant in Sault Ste. Marie has also been considered positive considerations.
If a memorandum of understanding is reached between the two companies, then a community engagement process with residents and First Nations can begin that will educate the community, explain permitting processes and explain how state-of-the-art ferrochrome facilities operate.
Coutts said Noront has committed actively engaging with the community if the chosen site is Sault Ste. Marie.
“This is just the start of the journey. Even though we pick a site it doesn’t mean we have a right to develop on it,” he said, referring to the extensive permitting process and Environmental Assessment process that will be required for government approvals.
Coutts said Noront is continuing to lobby the new provincial government and its ministers to get a road and infrastructure developed to the Ring of Fire.
Coutts said he’s encouraged by Minister Greg Rickford to the Minister of Northern Development and Mines and Indigenous Affairs and the minister’s understanding of the North and First Nation issues.
Coutts said that Noront is active in the field and has some ongoing exploration programs that includes the hiring of some neighbouring First Nations people.
“We want them to participate from the early stages and be active participants. That’s the key to building relationships,” he said.
A ferrochrome facility would process chromite from the Ring of Fire. Chromite is then used to make stainless steel.