MONTREAL — A new wave of expansion is taking shape in the Quebec-Labrador Trough iron ore mining region based on the industry's belief that global steelmaking demand will double within the next 15 to 20 years and prices will hold between $180 to $200 US a tonne.
Iron Ore Co. of Canada, the leading producer, says it has begun studying the feasibility of expanding annual capacity at its Labrador City mines, processing plants and port-loading facilities at Sept Iles, Que., to at least 50 million tonnes of iron ore in concentrates from 2016.
This compares with current annual capacity of 17 million tonnes, with two expansion projects under way that will bring the total to 26 million tonnes by 2013 with an investment of almost $1 billion.
But IOC, pioneer of the Quebec-Labrador iron mining industry, goes further, saying: "The study will evaluate options to initially increase production to 50 million tonnes from 2016 as well as consider the pathway for further expansion beyond this."
IOC said the timing is right to consider a project of this magnitude. "With the strong market demand for iron ore, the abundance of IOC's resources and the success of our ongoing concentrate expansion program . . . we need to look at how we can grow this business further."
CEO Zoe Yujnovich told employees recently the new study will consider ways to improve competitiveness and "multiple alternatives including new concentrators, mining pits and related mine, rail, stock handling and port infrastructure."
All options being studied will take into account the Labrador City and the Carol Lake mining area's community interests and social and environmental impacts. "Sustainable development is our goal and we'll work to build stronger communities and create positive economic opportunities for the region," Yujnovich said.
IOC did not disclose the investment required for the new expansion to 50 million tonnes or more, but industry sources said it is "several billions."
Parent Rio Tinto Group, second biggest iron ore producer in Australia, is now expanding annual capacity there to almost 250 million tonnes.
Quebec-Labrador has several large producers, including IOC and Cliff's Natural Resources Inc. and ArcelorMittal, with present combined capacity of about 48 million tonnes. Two smaller producers chip in over the next year. For the longer term, India's Tata Steel and projects backed by China's Wisco and Minmetals may add big tonnages.
High iron ore prices, quadrupled over the past seven years, have drawn in others, led by Adriana Resources Inc. and Alderon Resource Corp.
Montreal Gazette
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