TORONTO (miningweekly.com) – TSX- and NYSE-listed Alderon Iron Ore on Thursday said that affiliate Kami Mine Limited Partnership (Kami LP) had signed a ‘grant-in-lieu’ of municipal taxes agreement with the Town of Wabush, on the western tip of Labrador, regarding the development of the Kami iron-ore project.

Under the terms of the agreement, Kami LP would pay to Wabush a yearly grant-in-lieu of municipal taxes on the Kami project mining operations that would be located within the boundary of the Town of Wabush and its municipal planning area.

Kami LP would also provide a capital projects disbursement to the town, with the funds going towards required infrastructure needs. Payments under the agreement would start after initial production had taken place at the project.

As long as Kami LP made the payments required under the agreement, the town will not seek to charge or assess Kami LP for any municipal taxes in relation to the Kami project or the business carried on by the Kami LP on the project.

"This agreement is the result of our continuous positive working relationship with the local communities and marks the final municipal agreement required for our Kami project," Alderon president and CEO Tayfun Eldem said.

"We are confident that the agreement now in place with the Kami project will only brighten the future of both the community and industry. The Kami project will ultimately fill the void from the idling of Wabush mines,” commented Wabush Mayor Colin Vardy.

Operations at the Wabush mines ceased in February when iron-ore miner Cliffs Natural Resources decided to idle the mines with immediate effect.

Meanwhile, Alderon also announced that the Labrador City and Wabush municipal plan amendments, to rezone lands within the Kami project area, were now in force.

The footprint of the Kami project's future operations in Labrador was located entirely within the municipal planning areas of Labrador City and Wabush. The towns published these amendments in the March 14 edition of the Newfoundland and Labrador Gazette following their registration by the Provincial Department of Municipal Affairs.

These amendments were necessary to permit mineral extraction and mineral workings within the project area.

Further, Alderon also confirmed that after approvals by the federal and provincial environmental assessment process, it had received the federal Navigable Waters Protection Act approval and the federal Fisheries Act authorisation, fulfilling its obligation to Hebei Iron & Steel Group to receive the environmental assessment and related approvals for the Kami project before the March 31 deadline.

Alderon’s shares rose 4.45% on Thursday on the TSX to C$1.65 apiece.