Labrador City -
It's an exciting time for Consolidated Thompson (CLM) as the mining company gets ready to put its new world-class iron ore mine into full operation.
The Bloom Lake iron ore deposit, located in Quebec two miles south of the Quebec-Labrador border, is expected to have its first shipment of ore rolling down its new $100-million rail line some time between the end of February and the middle of March.
The 640-million tonne ore body promises as much as a 40-year life for Bloom Lake, and no one is more thrilled to see that history begin than Richard Quesnel, CLM's president, CEO and director.
"We are very pleased to be the new kids on the block, and we are on the verge now of completing the project," Quesnel said in a telephone interview from his office in Montreal. "We are finishing up some of the piping on the concentrator, so that is pretty well done. We've operated most of the equipment in the mill and we also produced a little bit of concentrate. This month, we will be commissioning a full blast of the processing facility."
Much of the equipment is in the operating mode, he said, Seventy per cent of the trucks, shovels and drills are assembled.
"We are training personnel in the mine. So, we now have a brand new mine with brand new equipment and a high-tech new rail line."
The 31-kilometre rail line - with a hefty price tag of $100 million - is just about completed, according to Quesnel. He said 20 kilometres of the track is already installed, leaving only 11 kilometres to complete. And that, he noted, is already prepped for the final process of laying the tracks.
The next job will be to get the port facilities in Point Noire (Sept-Îles) completed and ready for the first shipment of iron ore. As it all gets down to the wire, CLM's new date of spring 2010 is not too far off the initial target date of December 2009.
Greg Mercer, director of government relations and corporate affairs, is quick to sound CLM's trumpet as he comments on how the company rode out the global recession storm.
"When other projects were slowed or put on hold, we never stopped," Mercer said. "In some ways, I guess, (the recession) was the perfect storm."
The slowdown or postponements meant suppliers were readily available for Bloom Lake, he explained, and it left them with more manpower options .
"So, in that way, it worked out well for us and it worked out well for the community," Mercer said. "And, right now, we are poised to excel within a great market."
The mining company was able to secure financial supports in a time of global uncertainty, and when the timing was critical. Quesnel says CLM was on the edge of its own financial crisis, but in the end it all fell into place.
Wuhan Iron and Steel Corp. (WISCO), one of China's largest steel producers, jumped in on the venture with a $300-million investment that allowed for the completion of the Bloom Lake development.
"Getting strategic partners such as WISCO into the circuit was very good," said Quesnel. "Then the good co-operation we got from the Newfoundland [and Labrador] government has helped us accelerate some of those processes as we were getting out of the financial crisis."
As it all nears completion, Quesnel reflected on the enormity of the challenge CLM has met head-on and conquered in just a few years.
"Yes, I am a happy man," Quesnel said. "There has been a great effort in this from the suppliers and all the agencies involved. There are a lot of people who have worked hard to make this thing a reality. Here we are today getting closer and closer to being the next iron ore producer in Canada and certainly worldwide. We will be making an important contribution. And the towns (in Labrador West) have been very good supporters.
"I guess what we tried to do here - which is important - we've been in the area; we've lived in the area. We see this as (though) we got a social licence to operate here."
CLM provided cabin owners in the Walsh River area along the rail line with access to electricity.
The company has also committed to a much larger project: an underpass for the rail crossing between Wabush and Labrador City, designed to alleviate concerns with extra ore cars causing more delays on the crossing. That project will likely get underway in the summer of 2011, Quesnel said. CLM will finance the $10-million pricetag alone.
"We have committed to an underpass," he said. "We are doing it ... because we realize the impact this will have on the people and their daily lives.
"An underpass is another way we have achieved a social licence to operate, which we believe is important."
When Bloom Lake is in full operation, the mine will require anywhere from 250 to 275 direct workers on the site. The rail line will be operated out of Wabush with approximately 20 employees.
As for whether CLM is still looking at purchasing Wabush Mines - after two close attempts - it doesn't seem to be on the top of Quesnel's priority list.
"No, not really, I think," he says with a chuckle. "We've done it twice. Some of the existing owners have a positive view of Wabush and we wish them luck."