Alderon to spend $1.27B to start Kami mine

Ashley
Ashley Fitzpatrick
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President and CEO of Alderon Iron Ore Tayfun Eldem. — Telegram file photo

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.

 

afitzpatrick@thetelegram.com

Organizations: Alderon Iron Ore, BBA Inc., Stantec Consulting McOuat Ltd. of Toronto.The Kami

Geographic location: Montreal, Wabush, Cliffs Sept-Iles, Que

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Recent comments

  • miner
    January 09, 2013 - 18:21

    ADV fully diluted market cap: $300M, so much for multi-billion in order for governments to not go into debt they need the mining industry. would you rather be america on the brink of default or pay a little more tax. suck it up as for minerals being processed here, there aren't any decent-sized smelters in canada, let alone newfoundland. if you want to put your hand up to build one, multiply the cost of muskrat by 5 fold, then make another muskrat to power it

  • Maurice E. Adams
    January 09, 2013 - 12:22

    So additional debt will be incurred by low and middle income ratepayers/taxpayers and our scarce windfall oil revenues are to be passed over to Nalcor so that Nalcor can build a transmission line for Danny's mining company (Alderon)........ This is especially galling when you consider that it will cost somewhere in the range of 20-40 cents/KWh to generate and transmit the power to Alderon, and Alderon will pay only about 2-3 cents/KWh for that power ---- essentially near-zero cost power for multi-billion dollar mining companies paid for on the backs of low and middle income earners ---- Why incur that cost when Quebec could sell them all the power they need for competitive prices -----AT NO COST TO NL RATEPAYERS? ..... This government is making ordinary workers/homeowners pay dearly so that the mining industry can have higher profit margins. It is as simple as that.

    • Albert Webber
      January 09, 2013 - 13:32

      Labrador has been a meca for business paid for by the Labrador people... They come in, give a few low to lower job's to the local's too keep quiet. Then they reep all the benifits and leave a mess, for the Labrador people to suffer. All is not right with this... Take back Labrador!!!

  • HypocrisyWatch
    January 09, 2013 - 09:06

    Whatever happened to that bombastic premier of ours who used to say our resources like minerals should be processed here in NL? I wonder what he'd think of this Alderan plan?