UPDATE 1-Stalled talks put Cliffs Canada chromite project on hold
June 12 (Reuters) - Cliffs Natural Resources Inc said on Wednesday it is "temporarily suspending" work on its $3.3 billion chromite project in northwestern Ontario, raising questions about the development of the region's mineral-rich Ring of Fire. Cliffs said it would stop its work on the project, blaming the delay on stalled talks with the province's government and other political and regulatory issues. The Ring of Fire, some 1,500 km (1,000 miles) from Ontario's capital Toronto, is a remote cluster of mineral deposits that Canadian political leaders say could transform northern Ontario much as the oil sands have transformed Alberta. There are no rail lines, highways or reliable power sources in the region, and Cliffs' plan for Black Thor includes a $600 million highway that could open the zone to smaller mining companies such as Noront Resources Ltd. But Cleveland-based Cliffs has been battered by weak prices for iron ore and metallurgical coal, its core businesses, and it has been clear that it would need government support to build the highway. "We remain excited about this project and its potential for Cliffs and Northern Ontario; however, given the current unresolved issues, we cannot and will not unilaterally move the process forward and must manage our resources appropriately," said Cliffs' senior vice president Bill Boor in a statement. Chromite is refined into ferrochrome, used to make stainless steel, and Cliffs has touted the mineral as a natural next step for a company with long experience supplying the steel industry. But relatively high-cost iron ore producers like Cliffs have been hit hard by weak demand in recent quarters. At Tuesday's close, its shares were down 55 percent so far this year. Cliffs pegged its decision on political and regulatory delays - "unfinished" agreements with the province, legal challenges from some aboriginal communities and a delayed environmental assessment - not the tough market. Cliffs' shares rose 2.0 percent to $17.85 in early trading on the New York Stock Exchange.