Alderon unfazed by hold on CN rail study

The

head of Alderon Iron Corp. says the Kami iron ore development does not need a new CN rail service to the Northern Quebec-Labrador Trough area in order to move into construction.

Instead, the Quebec North Shore and Labrador Railway (QNS&L) is being pursued as the rail line for ultimately transporting material from the Kami mine to port.

“The QNS&L Railway is a common carrier that operates with the legal obligation to accommodate third-party traffic. It currently has ample surplus capacity and runs within 15 km of the Kami Property,” said Tayfun Eldem, president and CEO of Alderon, in a statement issued Wednesday.

“Alderon will continue its rail tariff discussions with QNS&L.”

The feasibility study for the new rail line to the iron ore-rich region, by CN and La Caisse de dépôt et placement du Québec, was officially put on hold this week.

The study included six interested mining companies — one being Alderon.

A statement issued by CN on Wednesday cited delays in mining developments in the area as a main reason for the study being put on hold.

“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,” said Luc Jobin, CN’s executive vice-president and chief financial officer.

Meanwhile, Alderon’s president expects to get back the $1.5 million that company contributed to the rail study last year.

At last estimate, the Kami project was to cost $1.3 billion to get up and running.

In a recent update for investors, Eldem said the Kami mine is expected to be released from the environmental assessment process in the fall, paving the way construction to start by the end of 2013.

Initial production is expected in the last quarter of 2015.