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Iceberg marks are pictured about 180 kilometres southeast of the proposed Ring of Fire development area.Reuters

Ontario's "Ring of Fire" mineral belt was supposed to be a $60-billion natural resources treasure trove that would bring employment and economic prosperity to a remote part of the province's north. It hasn't worked out that way.

The project's key player has given up, leaving the future of the deposit in question and hurting prospects that it will ever reach the lofty expectations of politicians.

Today, not much is happening in the Ring, a 5,000-square-kilometre crescent of mostly chromite in the boggy James Bay lowlands, 500 kilometres north of Thunder Bay.

The region was said to be so rich in resources that it would rival Sudbury's nickel basin and Alberta's oil sands. Instead, the area remains undeveloped, a victim of the global slump in commodity prices and bureaucratic red tape.

"I'm disappointed that it hasn't advanced more. It's a long time, seven years after discovery," said Neil Novak, the geologist who made the first discovery in the Ring and is now exploring for other metals as the chief executive officer of Black Widow Resources Inc.

In addition to the complete lack of infrastructure – there are no roads or power in the area – there is no real plan on how to mine the chromite, which is used to harden steel.

In fact, Cleveland-based Cliffs Natural Resources Inc., the American company that was supposed to develop the Ring, has thrown in the towel and is now trying to find a buyer for its chromite deposits.

Meanwhile, the Ontario government is nowhere close to a deal with local First Nations communities on how to share the project, a key piece of the province's vision to turn the area's mineral deposits into economic wealth for the region.

The situation today stands in sharp contrast to the excitement of a few years ago. Explorers flocked to the area and a bidding war broke out for the largest deposits of chromite. Politicians trumpeted the Ring of Fire as Canada's next big resource play, saying tens of thousands of jobs would be created and untold benefits would flow to northerners. Ontario member of Parliament Tony Clement, the federal Treasury Board president, called it a "game changer" for Canada and likened the economic impact to the oil sands. Ontario's then Premier Dalton McGuinty said it was the most promising mining opportunity the country had seen in a century.

But today, China's slowing growth and slumping steel sector have led to an oversupply in key parts of the mining industry, and make the case for development at the Ring of Fire hard to prove.

"It's strictly economics. If you can make money on it, then you go ahead. And if you can't, it sits on the shelf. That's the reality," said Don Hoy, the miner who discovered the large chromite deposit.

One junior miner is trying to mine the nickel, a smaller deposit than the chromite. Meanwhile, the provincial government is promising to spend $1-billion on a road to the area. But even if the Ring of Fire eventually produces chrome ore, it will face stiff competition from South Africa, the world's largest producer.

"It is a challenging market for newcomers," said Mark Beveridge, a senior consultant with global commodity research firm CRU Group. "It is a matter of cost and how cheaply it can be done from Canada. It would be a question of whether (Canada) could compete on price with the South Africans."

It's all a far cry from when Mr. Novak and Mr. Hoy discovered their deposits in 2007. Mr. Novak's team found nickel and copper in the summer and Mr. Hoy found the motherlode of chrome ore in the fall.

The province quickly pinned its hopes on an established miner to dig up the rocks, which contains some of the highest grades of chromite in the world. But Cliffs Natural, the company that took on the challenge, had little experience building a mine, much less working in the difficult terrain of Northern Ontario.

Nonetheless, Cliffs initially set an ambitious target of 2015 for the start of production and said it would build a ferrochrome processing plant near Sudbury. But the company faced concerns from the First Nations communities who live off the land, as well as what it saw as delays from the province. Cliffs shut its operations in the Ring last year, mainly because its flagship iron ore business had been hit hard by a sharp drop in prices. And last month it put the project up for sale.

Other companies followed suit and now only a handful are working in the ring. Noront Resources Ltd. is waiting for an environmental permit for its nickel project and is banking on the government to build a road to its mine site. Tiny KWG Resources Inc. is trying to raise funds to buy Cliffs' chromite assets. Other junior explorers are struggling to stay afloat.

Despite all this, the Ontario government is adamant the Ring must be developed.

"We are committed to our billion dollars because we recognize how crucial this project is," said Michael Gravelle, Ontario's Minister of Northern Development and Mines. When asked how the government knows it will be economical, Mr. Gravelle said: "That is why discussion with industry is so important."

As for whether the government would build the road without the mine, Mr. Gravelle replied: "There is no question there are other projects, other discussions going on related to opening up access to the communities. But what this gives us an opportunity to provide is access to an extraordinary economic development opportunity that can change the lives, not just of the First Nations in the area, but quite frankly almost everybody in Northern Ontario."

The government estimates the Ring holds $50-billion in chromite and $10-billion in nickel, copper and other metals. However, the $60-billion figure does not take into account the cost to build the infrastructure and all the other expenses that goes into mining and transporting the ore.

"Sometimes people get the wrong impression," said James Franklin, the former chief geologist for Canada who calculated the value. "It sounds like a big number, but after the costs are taken off, there may not be a lot left as profit. That said, much of this value ends up as money spent in Ontario, as salaries, indirect money spent on goods and services, and taxes, so the province would be a winner."

The mining process is also complicated. Unlike diamonds or gold, which are also mined in the province's north, chrome ore is bulky and heavy.

Cliffs had planned to mine 4.4 million tonnes of crude ore a year. The only way to get that much rock out of the mining site was by truck. And that would require a wide road and two sturdy bridges to cross a pair of large rivers in the area. After that, there's the issue of shipping the ore to China, the largest consumer of chromite. And if Ontario wants to turn the chromite into ferrochrome, which is much more valuable than chrome ore, a smelter will have to be built.

Another problem is the price of the resource. Like other steel-making minerals, such as iron ore and metallurgical coal, there is a glut of chromite in world right now, making it difficult to see the benefits of the development. It could be years before there is a recovery. The chromite market is expected to tighten by 2018, according to CRU Group forecasts.

"If you're going to spend a lot of time and effort on the social licence, permitting, First Nations, you better make sure that the quality of the underlying asset is worth it because it is going to be a long tough road to get all those other things done," said Noront CEO Alan Coutts. "You got to make sure that in the end that you have a profitable operation."

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