TORONTO (miningweekly.com) – Labrador Trough-focused project developer Alderon Iron Ore on Wednesday announced that the Canadian federal government had completed and approved the environmental assessment (EA) for the Kami iron-ore project, in western Labrador.

Canadian Environment Minister Leona Aglukkaq said in her notice of environmental assessment decision statement that the project posed no significant threat to the environment.

The decision statement sets out the Minister's conclusion that the Kami project was "not likely to cause significant adverse environmental effects".

As a result, the Kami project could now proceed subject to the terms and conditions included in any federal permits or authorisations.

On January 10, the Cabinet of Newfoundland and Labrador determined that the Kami project met the requirements of Part X of the Newfoundland and Labrador Environmental Protection Act and was released from the provincial EA process.

Combined with the favourable decision by the Federal Minister of Environment, Alderon was now in a position to move ahead with plans to start construction.

"The positive decision of the Federal Minister of Environment marks another enormous milestone for Alderon as we move forward with the development of the Kami project. We now have the green light from both the provincial Cabinet and the federal Minister and can move forward with our construction plans,” Alderon president and CEO Tayfun Eldem said.

The company has a 25-month construction plan for Kami and it hopes to start production from the mine in early 2016, with commercial production set to 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 had to complete financing for the project. Kami would be financed through a combination of project finance and equity.

A process is currently 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 had also 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 is fortunate to be in close proximity 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.

Last week, 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.

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 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.

Alderon also on Wednesday announced that Danny Williams had resigned from the board, but would remain as a consultant to the company in the role of special adviser.