Schefferville enjoying resurgence thanks to iron ore venture – by Robert Gibbens (Montreal Gazette – December 23, 2013)

http://www.montrealgazette.com/index.html

MONTREAL — In 1982 Brian Mulroney, then head of the Iron Ore Co. of Canada, suddenly announced the shutdown of the company’s Schefferville mines in Quebec-Labrador. The news hit Montreal 1,000 kilometres away like a thunderbolt.

Mulroney said the Schefferville mines, built in the early 1950s, were no longer economic at prevailing prices and IOC would focus on its newer mines and concentrators 217 kilometres south at Carol Lake, near Labrador City.

Now — more than 30 years after Mulroney’s coups de grâce — life is returning to Schefferville and the billions of tonnes of high-grade iron ore deposits lying along the 210-kilometre Millennium Iron Range.

In September, New Millennium Iron Corp. and India’s Tata Steel, through a 20-80 joint venture called Tata Steel Minerals Canada, began shipping beneficiated ore by rail from Schefferville to the Port of Sept-Îles. The ore is loaded into 150,000-tonne ore carriers for delivery to Europe.

This is known as the “DSO Project” and it is the New Millennium partners’ initial iron ore production effort at Schefferville. The direct shipping ore (DSO) is mined, crushed and screened and then loaded into railcars for the journey south to Sept. Iles.

The DSO project will cost $560 million when it reaches commercial production late in 2014. It will be shipping ore from Sept-Îles at an annual rate of 3 million tonnes by the end of 2014, rising to 6 million tonnes in late 2015, and has a mine life of 12 years or more.

“This is a landmark in the resurgence of iron ore mining in the Schefferville region,” said Millennium Iron’s president Dean Journeaux, previously a senior executive with the former Quebec Cartier Mining Co. (now ArcelorMittal Canada).

But the partners have much greater ambitions for their other Schefferville properties: the Taconite Project comprises two main deposits: KéMag and LabMag. When combined with several others in-between and nearby, the total resource is estimated at 29 billion tonnes of ore, including 9 billion tonnes for just KéMag and Labmag combined.

The Taconite Project has reached the advanced planning stage, with about 40 engineers and technicians at the New Millennium offices in Montreal and a dozen contract staffers in the field.

Kémag lies on the Quebec side of the interprovincial border and LabMag is just in Labrador. Each could have annual capacity of 22 million tonnes of beneficiated ore (in concentrates) and would require investment of about $5 billion (based on 2010 estimates), including transportation to Sept-Îles and a pellet plant, the partners say.

But it’s one project at a time, said Journeaux, and the partners must decide whether KéMag in Quebec goes first or LabMag.

Much will depend on the findings of a $50 million two-year full feasibility study due for delivery around this year-end. But decisions may also be influenced by Quebec’s new mining law.

“We don’t like some clauses but at least we know where we stand and we can move ahead with detailed planning and cost comparisons,” said Journeaux. “Tax rates are critical, but with so many variables, decisions will take time.”

The partners may decide to move the Taconite ore (in concentrates) from Schefferville to Sept Iles via a water (slurry) ferroduct, a technology used successfully elsewhere. It would be much less costly than building a new railway.

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