Adriana Resources not the only iron ore company backed by Wuhan Iron and Steel
Eager to get their hands on Canadian iron ore, Chinese backers of the Lac Otelnuk project in Northern Quebec — what Adriana Resources highlights as the country’s largest iron ore deposit — are willing to cover the construction of a new rail line to move the resource to processing and shipping facilities south, in Sept-îles.
President and CEO of Adriana Resources, Allen Palmiere, included the news when he spoke about Lac Otelnuk at an investors’ forum at the Sheraton Hotel in St. John’s Tuesday. He said regardless of the solution, transportation infrastructure is needed to move iron ore from the project across the 850-kilometre span to the coast.
The company is developing plans for a mine at the Lac Otelnuk find, expected to be capable of producing 50 million metric tonnes of iron a year. It hinges on having government approvals, aboriginal agreements, power and — something Palmiere focused on — rail access. “We have some challenges,” Palmiere said. “Mining’s the least of our issues.”
Despite having talked to CN about a rail project, Adriana Resources has not signed a deal with the Canadian railway company.
“We haven’t been in dialogue with CN for many months,” Palmiere said. “The discussions are certainly not closed by any means, but we seem to have hit a bit of a stumbling block.”
At this point, he said he does not see a CN-run railway as being in the best interests of his company. He described a user-owned railway — wherein the company teams up with others mining companies active along the Quebec-Labrador border — as “problematic” as well.
On the other hand, Adriana’s China-based partner, an arm of Wuhan Iron & Steel Co. (WISCO), has put forward an offer to see through the construction of a line for specifically transporting Lac Otelnuk iron ore, he said.
WISCO is a state-owned, “major backbone enterprise,” according to its own company profile, for the People’s Republic of China — requiring iron ore for manufacturing steel for a steel-hungry nation.
“It’s not a funding issue, it’s a political issue,” Palmiere said of a WISCO-funded railway.
The comment caused a stir amongst conference-goers, though Palmiere made no direct allegation of interference by governments on the railway or overall mine development.
Meanwhile, the company is focused on moving the project forward, including negotiating benefit agreements with aboriginal groups and arranging for an estimated 730 megawatts of power required for operations. Talks have been launched with Hydro Quebec on the latter, Palmiere said.
There has been drilling on the property in the last year, but not focused on finding more iron ore so much as detailing an area for the work up of a mine plan to move things along.
For the rest of this article, please go to the St. John’s Telegraph website: http://www.thetelegram.com/News/Local/2012-09-19/article-3078517/Rail-money-offered-to-Quebec-miners/1