Canada at War: ONTARIO: Steep Rock

The giant shovel dipped and took a three-ton bite of rich, iron-bearing earth. Steep Rock Mine was open at last. The men who saw this happen in the wilderness near Atikokan, Ont. knew they were seeing economic history in the making.

Steep Rock is a range of superhard hematite ore, the best on the continent. Its proved and probable iron deposits total at least 25 million tons. Engineers estimate unproved reserves up to ten times this figure. Expected annual production by 1946: 2,000,000 tons. This is small change compared to the 65,000,000 tons produced last year by Minnesota’s famed Mesabi range, but the comparison does not show the real importance of Steep Rock to the Canadian and U.S. steel industries.

What Steep Rock will ultimately mean to Canada, no one yet can say. Some Canadians have already talked optimistically of “a great metropolis in the bush of Atikokan, where great smelters will belch smoke. . . .” This much is sure: the Dominion, hitherto dependent on the U.S., now has a large iron ore supply of its own. This does not mean Canada will now supply fully the furnaces of its own young but lusty and growing steel industry. But it does mean that Canada will become, for the first time, an iron-ore exporter. And no longer will Canada have to import as much U.S. ore of grades comparable to Steep Rock’s.

In steelmaking, varied grades of ore are used. Steep Rock’s high-grade ore (it has a low silica and high iron content) is ideal for mixing with lower-grade U.S. ores. It would be impractical to use Steep Rock ore exclusively in steelmaking. Consequently Canada will ship much of Steep Rock’s production to the U.S. and continue to import lower-grade U.S. ores.

The Find. Geologists first stumbled on traces of iron around Steep Rock Lake, 40 miles north of the Minnesota border, in 1891. In the early 1900s, Harvard Geologist H. L. Smyth decided the main deposit might be under the lake itself. In 1930, Julian G. Cross, an Ontario prospector, poked around the site, came away sure he had something.

He did not get around to finding a backer for seven years. Then the late Joseph Errington, a Toronto engineer, listened for five minutes, took a chance. For $2,400 he and Cross bought up a lot of old claims. They drilled under the M-shaped lake, ultimately found at least three big ore bodies. Finding the ore was one thing, getting it out was another.

Chief problem: to drain Steep Rock Lake, which is fed by the Seine River. It was first necessary to lower the level of nearby Finlayson Lake 57 ft., then divert the Seine into it. Dams were built, canals and tunnels cut. Once the Seine was diverted, 14 mammoth barge-mounted pumps began sucking 125 billion gallons of water out of Steep Rock Lake itself.

Cost of all this was roughly $18 million. Part was supplied by the Dominion and Ontario Governments. Part came from the U.S. Reconstruction Finance Corp. in a tightly hedged $5,000,000 loan at 4% made to provide iron-insurance for the United Nations’ war effort. Part came from stock sales to the public. Part was supplied by Cleveland Financier Cyrus Eaton, when Canadian capitalists proved overcautious.