TORONTO (miningweekly.com) – Labrador Trough-focused project developer Alderon Iron Ore’s TSX-listed stock this week jumped after the company on Thursday announced that the Newfoundland and Labrador government had confirmed that it would build a third transmission line from Churchill Falls to Labrador West, ensuring ample electricity would be available for the company’s flagship Kami project.

Provincial energy corporation Nalcor Energy had previously confirmed that it would be able to supply power to Kami, but the new transmission line was necessary to ensure there was enough transmission capacity to deliver the power. The government’s announcement paved the way for concluding the power purchase agreement.

"Our government has no higher priority than to fuel the growth of opportunities and a region that is growing in industrial activity needs a secure supply of electrical power,” new incumbent Newfoundland and Labrador Premier Tom Marshall said in press statement.

"Construction of the third transmission line will meet power demands for new mining developments, attract investment into the region, and generate spin-off employment and business opportunities for the people of Labrador,” provincial Minister of Natural Resources Derrick Dalley added.

Alderon president and CEO Tayfun Eldem said that access to power is critical for the Kami project. “The announcement of a third transmission line paves the way to execute our power purchase agreement, which will greatly assist with the ongoing process for the previously announced debt financing for the Kami project," he said.

The $1.3-billion Kami project is expected to create significant and long-term economic benefits for the province - to the tune of about $3.9-billion in tax revenues and about $25.4-billion for the provincial gross domestic product.

With a total direct investment of $11.9-billion, the Kami project would also create about 800 construction and 500 full-time production jobs. This translates to a total of $2.7-billion being paid to Newfoundland and Labrador employees and businesses.

Alderon has collaborated with the province and Nalcor for more than two years to secure access to power, including paying upfront engineering costs of $4.4-million.

The company is currently in the process, led by BNP Paribas, of raising 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 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.

Alderon's TSX-listed stock had gained 12.71% since Monday and on Friday traded up 2.45% at C$2.09 a share.