SUDBURY, - Ontario's Liberal government announced a deal with Cliffs Natural Resources Wednesday to invest $3.3 billion to develop the Ring of Fire, a huge mineral deposit near James Bay, but First Nations are still not on board.

Cliffs plans to build a chromite mine, a transportation corridor to the area about 500 kilometres northeast of Thunder Bay, and a processing facility near Sudbury, announced Northern Development and Mines Minister Rick Bartolucci.

The Ring of Fire includes the largest chromite deposit ever discovered in North America. The proposed smelter would process the chromite into a key component of stainless steel.

The $1.8-billion smelter in Capreol will create about 900 new jobs, including 450 when the facility is in operation by 2015, said Bartolucci.

"There was stiff competition with other jurisdictions for the location of this smelter and those jurisdictions were outside the province of Ontario," said Bartolucci.

The minister admitted Cliffs and the province were still negotiating the final agreement and had several outstanding issues.

"Obviously there are a number of factors that Cliffs and the province of Ontario are still discussing and still working towards resolution," he said.

"What is important is that we’ve arrived at the stage where both Cliffs and the province of Ontario are very comfortable in our announcement that the smelter is going in Ontario."

Cliffs issued a statement describing the developments Wednesday as moving from the pre-feasibility stage to the feasibility study phase.

"Today's decision is a major milestone in our overall plan and adds more clarity to the project," said Cliffs' vice-president Bill Boor.

"A number of additional studies, including feasibility, and other milestones need to be completed before the company begins allocating a significant portion of capital to the project's construction."

One unresolved issue is whether the company will be granted an exemption to process some materials outside of Canada, and Cliffs is also concerned about Ontario's high electricity rates.

"That was and is a topic of discussion, as is the processing," said Bartolucci.

There is one estimate Cliffs will burn 10 million litres of diesel fuel a month at the mine site.

Bartolucci promised details of the agreement with Cliffs would be made public when it's finalized "in the coming months."

In the legislature, the New Democrats said processing of chromite in Ontario is key to keeping jobs in the province, and criticized Bartolucci for saying the details had not yet been hammered out.

"We think that’s a pretty important detail to be worked out, and thousands of good jobs rely on that detail," said NDP Leader Andrea Horwath.

"If we’re going to build a prosperous and sustainable future we need to be smart and focus on creating those good jobs."

Finance Minister Dwight Duncan said people in the north were celebrating the announcement and accused Horwath of "nitpicking."

The Progressive Conservatives said they were suspicious of "good news presented in vague terms," and questioned the government's ability to bring First Nations onside.

"It seems like there was two different announcements, and the one from the government made it sound like ore was being shipped as we speak," said Opposition mines' critic Norm Miller.

"Why were there no First Nations at this announcement because that can be a major stumbling block to hitting the timelines and making progress on this."

Bartolucci said First Nations must be "front and centre" as the development proceeds around the Ring of Fire, which also holds the potential for production of nickel, copper and platinum.

Duncan told the legislature the Cliffs' investment would mean employment for 1,200 First Nations people in Ontario.

But First Nations complained about the announcement, with one chief accusing Bartolucci of trying to head off opposition to the Cliffs mine and refinery "in a last ditch effort of questionable morality."

Chief Sonny Gagnon of the Aroland First Nation said a secret meeting arranged late Tuesday between him, the chief of Marten Falls and provincial officials raises serious questions about Bartolucci's ethics.

"We asked the minister to pause the Cliffs announcement on the refinery, but Bartolucci said he had no control over Cliffs," Gagnon said in a release.

"Who is really running this province? Our elected officials or an American mining company?"

The Nishnawbe Aski Nation complained Cliffs and the province were "ignoring First Nations" and said that is not the way to build a relationship with them.

"I am disappointed with today's announcement as it is obvious that Cliffs and the government of Ontario are not listening to and not respecting First Nations affected by development in the Ring of Fire," said NAN Deputy Grand Chief Terry Waboose.

The First Nations are worried about the environmental impact of the developments, saying it "threatens to open up a remote region of Ontario to uncontrolled mining development, dramatically alter river systems and discharge toxic pollution."

"The Cliffs project is the canary in the coal mine of the Harper government's rollback of environmental regulation," said Gagnon.

Environment Minister Jim Bradley said he expected both the Ontario and federal governments would conduct environmental assessments on the Cliffs' proposal, but wasn't sure what impact new federal legislation would have on the project.

"I won’t take advantage of the opportunity to take a swipe at the federal government until such time as we see precisely what role they are going to play in this," said Bradley.

"I can’t really predict whether that’s an instance flowing from their new legislation, but I know the environmental community is very concerned."