Bending Lake Iron Group (BLIG) has secured $325 million to construct the first of two proposed iron processing facilities at the Steep Rock mine site, and president and CEO Henry Wetelainen is now calling for the province to speed up its land tenure approval process.
“We will begin construction in Atikokan as soon as the government can issue us permits for the Hogarth Pit,” Wetelainen said earlier this month.
In addition to the $325-million loan guarantee from New York financier Triple A Guarantee, Wetelainen said the Thunder Bay-based company is in the process of accessing enough financing to fund the entire project—creation of the two facilities that would process iron ore from the company’s Bending Lake deposit 80 km north of Atikokan.
The construction of two iron processing facilities just five km north of town would provide 700 construction jobs. And once in production, the processing site and mine would provide more than 300 full-time jobs.
The first plant could be completed by 2012 and immediately would begin refining raw iron from the U.S. while waiting for the Bending Lake iron deposit to go into production—likely in 2015.
The second processing facility could be ready in 2014.
The only potential hold-up could be “cabinet level” approval to use the Steep Rock site, noted Wetelainen.
Northern Development, Mines and Forestry minister Michael Gravelle indicated after the announcement that he would work with the ministries of environment and natural resources to garner a decision as quickly as possible.
Rob Purdon, the MNR’s Steep Rock rehabilitation manager, said BLIG’s request would have to be determined to operate within the guidelines of the site’s sustainable long-term management plan.
A decision on whether the provincial government will re-open the old mine site should take place in the next few months.
If the site is approved for access, Purdon said the MNR then would solicit proposals from interested parties “in a fair, open, and transparent manner.”
“As part of that process, parties interested in using the site would have to demonstrate an appropriate level of technical study to show that their proposal would provide both benefits to the local economy, and demonstrate synergies with the rehabilitation objectives for the Steep Rock site,” he explained.
The economic and environmental benefits are clear, said Wetelainen. The technology used at the facilities would produce low toxic emissions and the Atikokan site would be the second in North America to host the process.
The process is called Iron-Making Technology Mark Three (ITMK3), and would produce merchant pig iron in the form of 97 percent iron concentrate pellets for use in steel production in small grey foundries, electric arc, and blast furnaces.
The first facility of its kind on this continent has been constructed in Silver Bay, Mn. by a consortium of steel producers.
One of those producers, Japan-based Kobe Steel, holds the ITMK3 patent and has made it available to BLIG.
“This is brand new technology in Northern Ontario,” enthused Wetelainen. “This type of technology will change the steel industry in North America; to be on the leading edge of this is fantastic.”
He said the tailings put into the Hogarth pit would be “basically cooked sandstone,” and that “our company’s plan is to treat that water and put it back into the river system at drinking water quality.”
“Everything that we’re going to do at Hogarth is going to be a plus,” Wetelainen pledged. “We’re going to bring greener technology and rehabilitate the site for the government.”
He said in addition to the spending of the current $325 million the company has in hand, it likely would spend another $300-350 million in Atikokan and probably $150-200 million at Bending Lake.
Wetelainen said the deposit had a bankable historic resource of 250 million tonnes of iron ore and with continued exploration, “we think it will push past 500 million tonnes.”
The open pit mine life “would be in excess of 60 years,” and has projected gross revenue of $17 billion over its lifetime.
The ore from the mine would be transported as slurry down an 88-km pipeline to the Steep Rock site (Brett Resources is in discussion with BLIG to collaborate on a pipeline and use of the Hogarth tailings pond for a potential gold mine possibly in production in 2015, said vice-president Joseph Ringwald).
Wetelainen said Steep Rock is the best location for the facility, given the brown field’s existing tailing pond set-up, and the CNR railway “right on our doorstep.”
The target market area for their product is the Great Lakes basin, and the company met earlier this month with CNR reps regarding shipment to customers in Canada and the U.S.
BLIG board members were meeting with more potential investors in New York last week.
Wetelainen said the small private company, which is aboriginal-owned, is proud to have secured the investment without requesting government funding.
The only hurdle now is receiving the government go-ahead, said Wetelainen, expressing frustration that discussions with ministries already have been ongoing for more than two years without a decision.
“They seem to be characteristically slow,” he charged. “I don’t think the government has any sense of urgency or sees the amount of hardship and joblessness felt in Atikokan and Northern Ontario communities.
“We’re taking Premier Dalton McGuinty at his word that Ontario is open for business,” he added.