CN shelves study of $5-billion Quebec iron ore railway line – by Bertrand Marotte (Globe and Mail – February 12, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Canadian National Railway Co. has shelved a study into a $5-billion project to build a major new railway line in northern Quebec to ship iron ore.

Montreal-based CN said on Tuesday it is suspending a feasibility study for the construction of the proposed 800-kilometre line that would run from Sept Iles on the Lower North Shore to Schefferville and then further on to the iron mines being developed in the Labrador Trough.

CN says the timing is wrong because of uncertainties regarding the completion of the various mining projects. The railway had teamed up with pension fund giant Caisse de dépôt et placement du Québec, with the backing of six mining companies, to fund the feasibility study.

CN said last week it is suspending preliminary planning work on the railway to give it time to evaluate the mining companies’ timetables on their respective iron ore projects. The initial deadline of June 2013 for completion of the feasibility study was pushed back. But now, CN says it’s putting the study – a key element of the project – on ice as well.

“We have invested considerable effort and resources towards the feasibility study, but in light of the circumstances, CN has concluded that it is not advisable to continue with the feasibility study at this time,” CN executive vice-president and chief financial officer Luc Jobin said in a news release.

The railway was to be an important element in the previous Quebec government’s ambitious northern economic development plan, dubbed Plan Nord.

Construction of the railway and terminal had been estimated at about $5-billion.

“The study has been progressing steadily over the past several months. However, the current market realities have resulted in anticipated delays with mine development projects in and around the Labrador Trough,” CN said.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/globe-investor/cn-shelves-study-of-5-billion-quebec-iron-ore-railway-line/article8483350/?ord=1

Comments are closed.