Feasibility Study for Proposed Labrador Trough Rail Line


New Millenium Iron, owner of the DSO iron ore project (pictured here), and four other iron ore companies announced
a joint effort with Canadian National Railway to study construction of a rail line and terminal serving the producers’
minesites in the Northern Labrador Trough region. (Photo courtesy New Millenium Iron)A
Canadian National Railway (CN) announced on August 10, 2012, that a customer group of five mining compa-nies—Cliffs Natural Resources, Labrador Iron Mines, New Millennium Iron, Cap-Ex Ventures Ltd. and Alderon Iron Ore— has committed to work with CN on a fea-sibility study into the construction of a proposed rail line and terminal handling facility to serve iron mines in the north-ern Labrador Trough of Quebec and Labrador. CN, its partner in the project La Caisse de dépôt et placement du Québec, and the five mining companies will fund the feasibility study to strengthen the cost and engineering parameters of the proposed rail network and its associated infrastructure.

The proposed 800-km rail line would link the Port of Sept-Îles to the mining region in the northern Labrador Trough. The feasibility study will also evaluate a new terminal handling facility to be located at the Port of Sept-Îles.

CN President and CEO Claude Mongeau said, “CN will work closely with mining companies in the group and the Caisse to determine the best design and right timing for the development of rail infrastructure to tap the significant iron ore production potential of the Labrador Trough in northern Quebec and Labrador. As North America’s largest hauler of iron ore pellets, CN is well positioned to respond effectively to the needs of our customers in this market and to do so in a sustainable and eco-nomically viable way.”

To advance the process as quickly as possible, CN will coordinate the applica-tion to the Canadian Environmental Assessment Agency for required permits for the project.

In earlier announcements on July 18, New Millennium, Champion Minerals and Labrador Iron Mines announced agree-ments with the Sept-Îles Port Authority to help fund a new multi-user deep-water dock facility to be located in the Bay of Sept-Îles at Pointe Noire. Phase I of the facility will be designed to have a total capacity of 50 million mt/y and is expect-ed to cost $220 million. It is being financed by the Port of Sept-Îles, the Canadian federal government, and com-mitments from potential end-users. Construction is expected to be completed by the end of March 2014.

New Millennium will invest C$38.4 million in the new dock facility in exchange for access to a minimum of 15 million mt/y of shipping capacity. The company has a take-or-pay obligation based on a discounted rate applied on 50% of the reserved capacity and is enti-tled under the agreement to transfer all or a portion of its annual capacity and the associated take-or-pay obligation to other users of the dock. The term of the con-tract is 20 years, with New Millennium having the option to renew for four fur-ther five-year terms.

Champion’s agreement to invest C$25.6 million in the project provides it with access to a minimum of 10 million mt/y of iron ore concentrate loading capacity. The loading facility is expected to be ready for use approximately 18 months ahead of the planned production start-up date for Champion’s wholly-owned Fire Lake North project.

Labrador Iron Mines has committed C$12.8 million to the project to reserve 5 million mt/y of annual shipping capac-ity, with a right to secure additional resid-ual capacity.

As featured in Womp 2012 Vol 09 - www.womp-int.com