Toronto-based KWG Resources and Canada Chrome Corp. have said that plans for electrifying a chromite mine in the Ring of Fire in Ontario are economically feasible.
The plan also includes construction and electrification of a railway to transport the ore to a processing facility.
The Electrical Infrastructure Capex report estimated total costs to be C$960.5 million for the Main Corridor, which includes mine electrical operating costs and the operation of the Rail-Veyor tramway system 330 kilometers to a processing or shipping location in northwestern Ontario.
Costs for the Indigenous Community Electrical Infrastructure amount to C$788.1 million, and would connect several Ontario indigenous communities to the Ontario power grid and optical fibre networks. Currently, these communities are operated on diesel generation.
The electrification plan is economically feasible due to low interest rates, currently at 0.25% and the amount of chromite resources in the Ring of Fire, according to the report prepared by OneLine Engineering, a subsidiary of electrical contracting company EPTCON.
Government support for the mine infrastructure should be more than C$1.5 billion, OneLine said in its estimate.
Competition for the chromite resources has increased in recent months, with BHP and Wyloo engaging in a heated race for Noront Resources, which has been working to develop the Ring of Fire deposit. Perth-based Wyloo Metals, founded by former Fortescue Metals Group chief executive Andrew Forrest, eventually prevailed.
Wyloo will acquire Noront for C$619 million, and expects to hold a special meeting with Noront shareholders in early January to finalise the deal, Northern Ontario Business reported.
KWG Resources is a junior exploration company operating in the Ring of Fire region, which wholly owns Canada Chrome Corp. Canada Chrome is focused on constructing a railroad from the Ring of Fire to a local processing or transshipment facility.