With nearly all the approvals in hand for its Kami iron project in western Labrador, TSX- listed Alderon Iron is gearing up to put shovels in the ground and start construction on what will be Canada’s newest iron-ore mine.

The company has a 25-month construction plan for Kami and CEO Tayfun Eldem says it hopes to push the start button on the mine in early 2016. Commercial production should be reached in the first quarter of that year.

However, before the board could give the go-ahead for construction of the $1.3-billion mine, Alderon first has to complete financing for the project.

Kami will be financed through a combination of project finance and equity. Eldem reports a process is under way, led by BNP Paribas, to raise up to $1-billion in project finance, which leaves $300-million to be raised either from the public markets or from a combination of public markets and a strategic partner.

Alderon has already signed up Chinese steel giant Hebei Iron & Steel (HBIS) as a strategic partner and the next partner will likely also be a steelmaker or a trader. The company is in discussions with steelmakers from Korea, Japan and Taiwan and also with traders from the Far East and Europe.

“There has been quite a bit of interest from overseas in taking up investment in mines in the Labrador Trough. To me, that signifies the importance of the Trough and the recognition of the very high quality of material,” comments Eldem.

Having a strong partner, such as HBIS, is one of the key differentiators in the Trough, where many junior companies are struggling to get their projects off the ground. Liberty Mines and Metals, a subsidiary of the Boston-based insurance group Liberty, is also backing Alderon and its Kami project.

Eldem highlights that Alderon is fortunate to be in close proxi- mity to infrastructure – another differentiator in the Trough. The Kami project is about 15 km away from a multi-user rail line, which has about 50-million tonnes of spare capacity, it has secured an allocation at a federal port and it is about 16 km away from the high voltage network, which will provide it with access to hydroelectric power.

Alderon will ship its iron-ore through a new multi-user deep-water dock at Port of Sept-Îles, in Quebec. The new $220-million facility is under construction and should be completed in the second quarter of this year.

“The bulk commodities are all about logistics and transportation. We mine and ship in tonnes, not in ounces, so having a railway on our doorstep is absolutely critical. It helps us to keep our capital costs down.”

The Kami mine is expected to produce eight-million tonnes a year of concentrate at a grade of 65.5% iron and could be expanded to 16-million tonnes a year.

Commenting on a power purchase agreement for Kami, Eldem says it has drafted an agreement and has, in principle, agreed to a deal with power utility Crown Corporation. It is awaiting execution, pending the provincial government’s decision to proceed with the construction of an additional transmission line.

With rail, port and power contracts in place, Alderon has managed to secure the “holy trinity of infrastructure”, Eldem says.

He also praised Alderon’s strong management team, which has “hands on experience, not only in the region, but also in iron-ore development”. “The management team is made up of very capable indivi- duals who have spent virtually their entire career building and operating mines. As CEO, I am extremely fortunate and blessed with such a capable team. I would go as far as saying, we probably have the best management team in the entire Trough.”