Alderon’s Kami iron ore project is in a “holding pattern,” says the company’s CEO, awaiting the completion of the project’s environmental assessment.
Alderon president and CEO Tayfun Eldem speaks about the company’s Kami project at the Resource Investors Forum at the Sheraton hotel on Monday afternoon.
— Photo by Daniel MacEachern/The Telegram
“Consequently what we’re doing is we’re advancing engineering, and we’ll continue to advance it,” said Tayfun Eldem, also Alderon’s president, just after he presented a project update at this year’s Resource Investors Forum at the Sheraton hotel on Monday afternoon.
“As well, we’re working on the infrastructure agreements. We have been in ongoing discussions with Nalcor for quite a while now, and we’re now almost on the verge of completing a power purchase agreement, which we expect to have in place sometime this year.”
While it awaits the release of the environmental assessment — expected later this year — Alderon is also in discussions with the Iron Ore Co. of Canada and Cliffs Natural Resources to work out rail agreements. It is also negotiating the benefits agreement with aboriginal groups and the government of Newfoundland and Labrador.
The company is also taking steps to arranging a billion dollars in financing for the project in Western Labrador.
“We’ve just announced our lead arranger, BNP Paribas, for debt financing,” he said. “Parallel with that, we’re working on bringing another offtake partner to the table.”
The $1.27-billion Kami project is 25 per cent owned by the Chinese Hebei Iron and Steel Group, which also has about a 20 per cent stake in Alderon, and has also pledged to buy 60 per cent of the annual production of an estimate eight million tonnes per year.
Alderon estimates the project will provide 39,000 person-years of employment and contribute
$3.9 billion in taxes to the province over its projected 30-year life. Eldem said the 30-year estimate is based on one billion tonnes of ore, but the project has an established 1.8 billion tonnes, meaning the project could “easily” be extended an extra 15 years, he said.