August 9, 2014 - When I was a youngster, we had a neighbour who kept a jar of coins. When kids would visit, he’d offer the jar and say, “take as many as you like.. If you grabbed too many, your bulging fist wouldn’t make it through the neck of the jar. Lesson learned.
As the development of the Ring of Fire moves ahead, those involved will need to make complicated decisions on how much of the Ring’s wealth to keep in Ontario and how much to let go.
At this point, there are many scenarios of where the North’s chromite might end up. It’s certain that the raw ore will be reduced to concentrate at the mine sites, but after that, it’s a guess. When Cliffs Natural Resources was grabbing the headlines, the plan was to have the concentrate shipped to Sudbury to be turned into ferro chrome at a new smelter they would build in Capreol.
Right now, it’s debatable whether the Ring’s chromite will ever see an Ontario smelter due to provincial electrical costs. Quebec and Manitoba sell their power to industries for less than three cents per kilowatt hour (kwh), while Ontario’s rates are based on a spot market that is often double that.
Other than government intervention, there is nothing that would stop a company from shipping the chromite directly to another province or to another country. At the very least, Northerners want the chromite smelted into ferro chrome in the North.
The pinnacle of value-added chromite would be the production of stainless steel from that ferro chrome, an industry that does not yet exist in Canada. There’s only one country in the world that has all four resources to make stainless steel by combining cheap electricity, iron, chromite and nickel: Canada. Thanks to the Ring of Fire, the chromite, iron and nickel can all be found in Northern Ontario. But the cheap power is in its neighbouring provinces.
Businesses can’t be expected to pay higher rates if the hydro is cheaper nearby, unless there are significant other factors to offset that cost. The introduction of subsidized hydro rates for industries in the North would be one approach to compete with Quebec and Manitoba, albeit on the backs of all Ontarians.