$5B rail line to boost Quebec resources – by Nicolas Van Praet (National Post – March 22, 2012)

The National Post is Canada’s second largest national paper.

MONTREAL – It rated just a six-paragraph mention among hundreds of pages of Quebec government budget documents. But it will be one of Canada’s largest infrastructure projects when it gets off the ground – a multibillion-dollar effort to build a huge railway across an isolated stretch of rugged land and accelerate the province’s push into natural resources.

Canadian National Railway Co. and pension fund manager Caisse de dépôt et placement du Québec are teaming up on an estimated $5-billion project to lay down a new track stretching 800 kilometres from the port of Sept-Îles north past Shefferville into the mines of the Labrador Trough. The aim is to serve major iron ore producers like Cliffs Natural Resources and juniors like Adriana Resources Inc., as well as other current and potential miners, that are searching for a better way to get their Quebec-produced material to international markets.

The project is in its early stages but is expected to be completed by 2017 if talks underway with mining companies yield firm transport agreements. Once those commitments are reached, the railway will do a feasibility study.

CN estimated Wednesday it will hire 1,000 new permanent employees, from signallers to engineers and maintenance staff, to staff the rail link. It hasn’t executed new construction of this magnitude in years.

Caisse officials talk about the project in terms of “nation building” for Quebec. They say it’s in the same vein as the James Bay power project of the 1970s, which vaulted the province into the big leagues of hydroelectric production.

“You have to go back to the 1950s to see a railway project of this scale” in Canada, said Jean-Paul Viau, a railway historian based in Montreal.

That decade, the privately owned Cartier Railway was built to transport what is today ArcelorMittal’s iron ore concentrate from MontWright over 420 kilometres to Port-Cartier. Iron Ore Co. of Canada, majority-owned by Rio Tinto, also operates a 419-km rail line from Labrador City to Sept-Îles. It is not involved in the current negotiations, a spokesman said.

Chinese investors, desperate to secure iron ore supply to make steel, are pouring money into greenfield iron ore projects in the Labrador Trough. In March 2009, stateowned Wuhan Iron and Steel Corp. plowed US$240-million in Consolidated Thompson Iron Mines Ltd. just after the financial crisis.

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