New Millennium Capital Corp. aims to become one of the biggest miners in western Labrador — and its direct shipping ore project is the first step toward that goal.
The company’s proposed Elross Lake area iron ore mine was released Wednesday from further environmental assessment by the provincial government.
Robert Martin, president and CEO of New Millennium, said the company expects to start open-pit mining its four Labrador iron ore deposits in 2012.
With the environmental approval in hand, the company’s next step is acquiring permits for construction.
“Our plan is to start construction in early summer and then to start production from the mine itself in early summer of 2012,” said Martin.
“It’s actually Phase 1 of the direct shipping ore project.”
The second phase takes the project into Quebec with additional iron ore production scheduled for 2013.
New Millennium expects to receive environmental approval from the Quebec government by the fourth quarter of this year.
Approval of the mining project is subject to five conditions by the Newfoundland and Labrador environment department.
They are: finalize a women’s employment plan; confirm groundwater resources near two iron ore deposits, Timmins and Timmins 6, before any mine effluent is released; prepare a contingency plan in case the mine’s slurry disposal capacity is reached at those sites; install a real-time program to monitor water quality and quantity; and prepare a caribou environmental protection plan that must be approved before any construction starts.
Martin calls them “customary conditions” for this kind of project and he doesn’t expect any delays as a result.
“Some of them are quite well advanced at this point in time, and we don’t anticipate any problem achieving those conditions.”
Iron ore upgrade
New Millennium’s deposits in Labrador and Quebec were previously mined by the Iron Ore Company of Canada until 1982.
“We’re mining the same ore, but we’re upgrading it from about a 59 per cent iron to a 64.5 per cent iron, which is a saleable product,” said Martin.
“We’ll mine those out over the next 15 years at a production rate of about four million tonnes per year.”
Martin said the total direct shipping ore project is worth roughly $500 million, including Phase 2 in Quebec.
More than two-thirds of that estimated price tag includes capital costs, such as laying 30 kilometres of railway tracks to link the mine to the Schefferville rail line for transporting ore to Sept-Iles, Que.
From that port, the ore will be shipped to Tata Steel plants in the U.K. and western Europe.
As New Millennium’s partner and largest shareholder, Tata bought exclusive rights to the ore. Headquartered in India, Tata is one of the world’s largest steel producers.
Future iron ore plans
To become one of the largest mineral producers in Labrador, the company also has plans for a taconite project dubbed the Millennium Iron Range.
It consists of two iron ore formations located on either side of the Labrador-Quebec boundary — New Millennium’s 80 per cent owned LabMag property in western Labrador and its 100 per cent owned KeMag property in Quebec.
Taconite is a low-grade iron ore containing a high percentage of magnetite.
Martin said the magnetite can be concentrated to produce high-quality iron.
“So, our product ends up at 68 per cent iron instead of 64.5 per cent as it does in the direct shipping ore mines.”
Martin said it’s a sizable taconite resource — about nine billion tonnes according to the company’s estimates.
“Based on proven and probable reserves, we can run for 74 years at a production rate of 22 million tonnes per year.
“We’re hoping to get the taconite project into production around 2015-2016.”