For Altius Minerals, the road to developing iron ore projects in western Labrador leads to China.
Altius president and CEO Brian Dalton told company shareholders Wednesday the undeveloped iron ore resources in western Labrador are among the best in the world.
And the St. John’s-based mineral exploration company is hoping its iron ore prospects will whet the appetite of the Asian juggernaut that is searching for new supplies of raw materials.
It’s one reason Dalton spent the past month in China.
He returned this week to attend the company’s annual shareholder meeting.
Dalton said understanding how China factors into future commodity pricing simply makes good business sense.
“The Chinese market is the margin factor.
“So, getting a first-hand feel for the development that’s happening in China, how sustainable it is, how vulnerable it is to economic fluctuations — that was really important.”
Dalton is aiming to build a network of contacts and local sources of information rather than rely on third-party analyst reports on China.
“If I’m going to make a bet — and this is the biggest factor in whether it works or not — I’m going to go and see it for myself before I make the call.
“I won’t be able to do it unless I have that first-hand feel, and I think that’s what shareholders should expect from us.”
China needs steel, the common ingredient in building subways, office buildings, apartment complexes and cars.
Dalton said Chinese steel manufacturers and state planners are concerned about where they’re going to find the raw material for that steel in future.
“It’s a really high priority in China right now.
“So, we’ve got to make sure our projects in Labrador are on the radar screen, and to do our best job of making sure that they are recognized for what they are — these are really top-tier assets in the world.”
“So, getting a first-hand feel for the development that’s happening in China, how sustainable it is, how vulnerable it is to economic fluctuations — that was really important.” - Brian Dalton
Increasingly, Dalton said the companies buying into mineral exploration projects are based in China.
“There’s a growing group of companies out there that we just don’t have relationships with.”
It will take time to develop those relationships, but Dalton figures it will be worth it.
“From what I’ve seen, in only a month, there is plenty of reason to work hard at building these relationships and building trust — and that’s a two-way street.”
He’s taking a full-immersion approach, and expects to soon head back to China for another month.
Altius has been exploring for iron ore in western Labrador since 2003, and has several properties in the region.
Among them: a prospect dubbed Kamistiatusset, or Kami for short; the Julienne Lake property near IOC’s Carol Lake operation; and the Snelgrove Lake property near Schefferville.
Altius co-founded Alderon Resources to further explore the Kami prospect.
Dalton said there’s room for more iron-ore production from the Labrador trough, a mineral formation that runs through the west and into Quebec.
“That geological formation and its iron ore deposits, in my mind right now, should be very high-ranking in a list of global opportunities for new iron ore developments.”
Chinese investors are already active in the mineral sector in Eastern Canada.
“The stage is already set,” Dalton said.
Wuhan Iron and Steel Corp. bought 20 per cent of Consolidated Thompson Iron Mines for $240 million to develop the Bloom Lake mine in Quebec.
In return, Wuhan, one of China’s largest steel producers, gets a secure supply of iron ore from the mine which started production earlier this year.