President and CEO of Alderon Iron Ore Tayfun Eldem speaks with The Telegram at the Sheraton Newfoundland Wednesday. — Photo by Keith Gosse/The Telegram
Alderon Iron Ore Corp. is expecting to spend $1.27 billion to get its Kami mine project up and running.
The company released the results of its feasibility study for the project this morning, including the total cost and other key figures for the development.
Construction is set to start by year-end.
If construction and start-up comes in on time, the project will be up and running by the end of 2015, according to the study.
The mine has been designed to produce eight million tonnes of iron ore concentrate a year, at 65.2 per cent iron. It has an estimated life of 30 years - longer than initially expected.
“The study demonstrates robust economics on the Kami Property and the results meet all of the threshold criteria under our agreements with (partner) Hebei (Iron and Steel). Our schedule anticipates receipt of permits toward the end of 2013 and construction to follow immediately, with initial production in the fourth quarter of 2015,” said Alderon president and CEO Tayfun Eldem.
The study — providing a more specific definition for the project compared to the earlier preliminary economic assessment - was completed by BBA Inc. out of Montreal; Stantec Consulting in St. John’s; and Watts, Griffis and McOuat Ltd. of Toronto.
The Kami project site is about 10 kilometres from Wabush and six kilometres South of Cliffs Natural Resources’ Wabush Mines.
“Nalcor will provide power directly to the Kami site main substation by means of a 315 kV transmission line,” the company states.
Product from the mine will be sent by rail to the port in Sept-Iles, Que, for shipping.
In presenting the details of the study to investors this morning, Eldem made note the company is planning for a larger worker camp from what had been planned when the preliminary assessment was done.
As it turns out, Eldem said, there was not enough accommodations in the area to take on as many workers as had been expected.
The project has yet to be released from environmental assessment, but the company is hoping to see the end of that process at the end of September or early October.