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MONTREAL – A clash over infrastructure assets is shaping up in northern Quebec, pitting the interests of two corporate titans against a group of junior miners.
At stake is the transport of as much as 200 million tonnes of iron ore by rail, an annual moving bill that could top $1-billion, and the long-term ownership and usage rights of a key transportation link.
Canadian National Railway Co. and pension fund manager Caisse de dépôt et placement du Québec confirmed this week they are working on an estimated $5billion project to build a new 800-kilometre railway stretching from Sept-Îles north past Shefferville into the Labrador Mining Trough. The partners need firm transport commitments from mining companies before they can proceed.
But miners active in the region have been sketching out their own plan for a railway for more than two years, with the objective of controlling their own transport costs. They are worried that paying CN to move their iron ore powder or pellets will prove too expensive.
“The industry is the final payer. And without the payer committing, I think a multibillion project will have some difficulty of even getting started,” said Sandy Chim, chief executive of Century Mines Corp., one of three miners that have been actively talking with a view to starting their own railway to move their eventual output.
“We don’t want to be caught in a situation where, after a multi-billion investment [to mine the mineral], we cannot ship out goods. Way before production happens we have to work on the logistics.”
Century, Canada’s largest holder of iron ore land claims, has interests in several properties in Quebec and Labrador. After raising funds from China-based Wuhan Iron and Steel as well as MinMetals Exploration Ltd., the company has secured access to the Chinese market and is targeting initial production in three years for its smaller mines.
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