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Dramatic increase in domestic and foreign investment in iron-ore projects fuelling port’s renaissance
A Klondike-type fever is gripping this port city facing a spectacular, semi-circular bay located more than 900 kilometres east of Montreal on the North Shore of the St. Lawrence River. The great catalyst, however, is not gold but a dramatic increase in domestic and foreign investments in iron ore projects, notably with a view to supplying the vital commodity for steel mills in China.
In short, in this relatively remote area of Quebec, a sleeping giant has awakened – signalling the ascension in the near future of Sept Îles as Canada’s second-biggest port after Vancouver in terms of volume. It is already the leading mineral port in North America.
Money is pouring from steel producers into the substantial, still-unexploited iron ore deposits in what geologists identified long ago as the Labrador Trough centred on Schefferville, nearly 800 kms north and connected to Sept Îles by a single rail line.
It all symbolizes a virtual economic renaissance following a long period of decline ushered in by mine closures in Schefferville in the 1980s and a collapse in demand from world markets. Adding to the overall boom palpable in Sept Îles is the mushrooming effect of the Hydro-Quebec La Romaine power project in northern Quebec.
“All around us, we see opportunity,” remarks Guy Dionne, the local operations manager of Lower St. Lawrence Ocean Agencies. “Nothing can stop us as long as we have cargo to export. Maybe even container shipping will happen one day.”
Similarly bullish was Danny Labrie, harbour master for the giant ArcelorMittal Mines Canada (AMCC) industrial complex in nearby Port Cartier. This multinational last year announced investments of more than $2 billion for expanding its Mont-Wright mining complex and increasing production of iron ore concentrate from 14 million tonnes to 24 million tonnes by 2013.
“The region,” Labrie said, “is witnessing tremendous growth, and there are some definite synergies between Port Cartier and Sept Îles.”
Already, Sept Îles is North America’s leading iron ore maritime export gateway and aluminum transshipment centre.
With some analysts predicting up to $41 billion in potential investments by private industry and the Quebec government through the Plan Nord over the next decade, Pierre Gagnon, president and CEO of the Sept Îles Port Authority sees some very big traffic numbers ahead, indeed, for his port.
“If all current and planned projects are brought to completion, our iron ore cargo volume could approach 200 million tonnes by 2020 compared with 26 million tonnes in 2011,” he said in an interview. This year’s throughput is expected to reach 32 million tonnes as opposed to 123 million tonnes at Port Metro Vancouver.
Gagnon said he was reassured by current firm trends in world iron ore prices and the long-term demand forecasts, especially from China.
One project he is especially enthusiastic about involves Russian steelmaker Severstal which, with Cliffs Mines Wabush, is conducting a feasibility study to build a processing plant that would produce 2 million tonnes of iron pellets annually.
“For more than 60 years,” noted Gagnon, “we have been exporting our concentrates – now we can see transforming them on the horizon. It’s a new era on the horizon.”
In 2010 and 2011, more than $250 million in private and port funds were allocated to various port properties.
For the rest of this article, please go to the Montreal Gazette website: http://www.montrealgazette.com/technology/Sleeping+giant+awakened+Sept+%c3%8eles/6513363/story.html