A group of five mining companies have backed the Canadian National Railway (CN) to work on a feasibility study for its proposed CAD5bn ($4.9bn) rail link in northern Quebec to transport iron ore from the region.

The proposed rail line and terminal handling facility will serve the iron ore producers at the Quebec-Labrador border.

Mining participants in the study include Labrador Iron Mines Holdings, Cliffs Natural Resources, New Millennium Iron, Cap-Ex Ventures and Alderon Iron Ore Corp.

The five mining companies will help pay for the study, along with CN and partner La Caisse de Depot et Placement du Quebec, a prominent Canadian investment fund.

The feasibility study is intended to progress the cost and engineering parameters of the proposed rail network and its associated infrastructure.

CN president and chief executive officer Claude Mongeau said: “CN will work closely with mining companies in the group and the Caisse to determine the best design and right timing for the development of rail infrastructure to tap the significant iron ore production potential of the Labrador Trough in northern Quebec and Labrador.”

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By GlobalData
“The proposed 800km rail line would connect the Port of Sept-Iles on the Gulf of St. Lawrence to a mining region north of Schefferville, Quebec.”

CN has said that it will co-ordinate an application to the Canadian Environmental Assessment Agency that allows the feasibility study to be launched, clearing the way for discussions with affected parties, including First Nations communities.

Labrador Iron Mines Holdings (LIM) president and CEO Rod Cooper said the development of a new railway in the Labrador Trough would provide options for long-term rail capacity, with the potential for greater efficiencies and optimisation of rail access.

“In addition, a new terminal handling facility at the Port of Sept-Iles would complement the planned development of the new multi-user dock at the port, in which LIM is also participating,” Cooper said.

The proposed 800km rail line would connect the Port of Sept-Iles on the Gulf of St. Lawrence to a mining region north of Schefferville, Quebec.

Scheduled to be launched in 2017, the project is expected to generate more than CAD2bn ($2.01bn) in annual revenue for CN.

Image: Five mining companies will help fund CN’s feasibility study for an 800km rail line between the Port of Sept-Iles and Quebec’s iron ore mining hub. Photo: courtesy of CN.