Ring of Fire partnership
Three months ago, Sault Ste. Marie was announced as the host city for a ferrochrome smelter facility to process material from the ring of fire.
Algoma Steel and Noront have officially become partners to build the smelter facility.
The companies say Algoma is giving up part of its land in exchange for a stake in the mining company.
"We have compensated Algoma with share issuances of Noront Resources to make them a partner," said Alan Coutts, Noront Resources.
Algoma is receiving 750 thousand shares in Noront and the option to buy another 750 thousand in the next five years. The mining company also has five years to decide if it wants to sign a 99 year lease agreement with the steel plant.
"The five years is a period that I believe is the construction. That they're talking about in five years. So we have given ourselves a five year runway for the other pieces of the puzzle to come together," said Michael McQuade, Algoma Steel CEO.
While no cash is being exchanged in these agreements, the steel plant has the ability to make millions if the ferrochrome smelter is built.
"The real value for Algoma will be is when we have the arrangement in place for the 99 year lease. Algoma will get paid for every ton of ferrochrome that gets produced at the site. And that annual payment could be sort of in the region of two to five million dollars," said Coutts.
It was also announced that an engineering company from Mississauga will be designing the facility.
Up next for the company will be an extensive environmental study.
Along with city officials, both Norton and Algoma Steel will take part in an 'open house' on October 23 to speak with any citizens concerned about the smelter being built in Sault Ste. Marie.