Proposed Ontario Ring of Fire railway faces issues

January 20, 2016

by DCN NEWS SERVICES, , Daily Commercial News

TORONTO—China Railway has agreed with KWG Resources to undertake a feasibility study into building a rail line between Nakina, Ont. and KWG property in the Ring of Fire. But even if the railway is eventually given the green light, full development of the mine remains a distant prospect.Website Insert Fleet for Sale or Lease copy

Moe Lavigne, vice-president of exploration and development for KWG, laid out a possible development scenario and indicated that environmental approvals, permits, funding, other infrastructure plans, co-operation with First Nations and construction timelines are still uncertain.

Here is a closer look at some of the issues:

■Construction at the Black Horse site would be relatively simple, with the cost to dig the shaft as low as $250 million, says Lavigne.  But the railway, which might employ 1,000 construction workers, might have a price tag of $2 billion. Who would foot the bill? China could be one investor — it needs chromite so it might take payment as a partner in the enterprise.

■Nakina has been selected by KWG as the southern terminal of the new railway because of its location just north of the national CN Rail line and also the Trans-Canada highway. China would be able to transport raw chromite west to British Columbia by rail, to be shipped overseas. Nakina also sits on an abandoned rail bed with a connection to Pagwa and Hearst. Can Ontario Northland be convinced to retrack the line from Nakina to Pagwa, so that ferrochrome produced at Nakina can be shipped through to Montreal?

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