(February 22, 2011) Energy Probe executive director Lawrence Solomon writes in today’s Financial Post about how politically correct green power projects could kill a multi-billion dollar mining development.
Cliffs Natural Resources, one of North America’s largest miners, wants to make an $800-million investment in Northern Ontario and Premier Dalton McGuinty, with an election expected later this year, wants to clinch a deal for the 500 jobs that would result.
Only one problem: McGuinty is also attached to green power and the soaring electricity rates that it causes – a deal breaker for Cliffs. In Quebec and Manitoba, Cliffs explains, it could get power for its project – a 300-MW ferrochrome smelter — at half the cost or less.
To keep Cliffs’ smelter in Northern Ontario, McGuinty is negotiating ways to give the mining giant relief. Only one problem: All of the options on the table would be especially burdensome for southern Ontario voters.
One option reported to be under discussion would see a portion of the provincial grid hived off to create an industrial north zone. The south zone would be treated more as a green zone, to have the province’s politically correct southern voters bear the lion’s share of the costly “smart-grid” additions to the grid. Smart-grid additions have no economic justification – they merely support large-scale wind and solar generation, which also have no economic justification. Cliffs understandably doesn’t want to bear the burden of supporting these so-called green projects, which hold no benefit for an industry that requires reliable power. Other options involve various subsidy programs, such as guaranteed lower rates for the smelter, paid for by higher rates for southerners.
The smelter is needed to meet China’s soaring demand for ferrochrome, the component of stainless steel that gives it a chrome-like appearance and makes it corrosion-resistant. The smelter would form part of a larger project that would first process chromite ore from Northern Ontario’s Ring of Fire region, a mineral-rich wilderness that is thought to contain commercial quantities of platinum, palladium, nickel, copper and diamonds as well as having the continent’s largest deposit of chromite ore. The chromite ore would then be transported to the smelter by road and rail in a mining-transportation-smelting project involving 1300 jobs and an ultimate investment of $2-billion to $3-billion.