TORONTO (miningweekly.com) – The Quebec government has formed a partnership with mining companies Champion Iron and Lac Otelnuk Mining to undertake a feasibility study for the construction of a multi-user railway, linking the Port of Sept-Îles with the Labrador Trough, a 1 600-km-long geological belt rich in iron-ore deposits.
The government and the mining companies had established a special-purpose entity, the Northern Quebec Railway Partnership (SFNQ), to carry out the study, which was expected to cost up to C$20-million. The SFNQ would be open to other mining companies to join.
The Quebec government would partially fund the study through its 2014/15 budget, which was announced in June.
The rail line would probably be built in phases, but no start-up date target had been provided for the project.
The Canadian National Railway company (CN) last year shelved the feasibility study for the construction of its proposed C$5-billion railway line and terminal handling facility to serve the Quebec/Labrador iron-ore range, owing to adverse market realities, which forced project developers to defer expected project start-ups.
The feasibility study was started in August 2012 by CN and its partner La Caisse de dépôt et placement du Québec (the Caisse), along with a group of six mining companies.
A review of the project, together with the mining companies, had, however, indicated that mine construction schedules and diverging needs for each specific project would make it difficult to obtain the critical volumes of iron-ore necessary to support the building of new rail and terminal infrastructure by CN.