Quebec to fund feasibility study on iron-ore rail line

The province of Quebec plans to allocate up to $20 million in its 2014-15 budget to fund a feasibility study on a new iron-ore rail line in the Labrador Trough.

The provincial government aims to set aside the dollars in its Northern Plan Fund to determine if a new rail line should be built or capacity should be expanded on an existing rail line between iron-ore mines and the Port of Sept-Îles to help miners serve international markets more competitively. The Labrador Trough hosts one of the world’s largest iron-ore accumulations, with annual production totaling about 50 million tons.

The study will consider the concerns of all potential users to ensure the creation of a multi-user rail system favoring joint investment, according to the province.

Iron-ore exploration and development firm Champion Iron Ltd. welcomed the province's decision to fund the study. The rail line would stimulate further investment in the Labrador Trough and help establish Quebec as "a region of international significance for the mining industry," said Champion Iron Chairman Michael O’Keeffe in a press release.

“At a time of uncertainty in investment markets regarding the outlook for iron ore, this decision will be seen as a defining point in the history of the mining industry in Quebec," he said.

The world's major steel industry groups believe the Labrador Trough has a growing potential to supply high-quality iron ore, said Champion Iron Chief Executive Officer Thomas Larsen.

"This multi-user rail initiative … provides the company with a potentially clearer path towards the eventual delivery of product to the Port of Sept- Îles in a competitive and cost-efficient manner," he said.