Mining putting up estimated $3.8m to advance engineering
President and CEO of Alderon Iron Ore Tayfun Eldem speaks with The Telegram at the Sheraton Newfoundland Wednesday. — Photo by Keith Gosse/The Telegram
Alderon Iron Ore is looking to have hydro power from Nalcor Energy feeding its new Kami mine project, currently in development in Labrador.
According to a statement issued Thursday, the mining company has signed an agreement with Nalcor to begin front-end engineering and design work on plans to link the mine site with Newfoundland and Labrador Hydro’s existing transmission infrastructure.
The engineering work, estimated to cost about $3.8 million, will be paid for by the mining company. The company has also paid all costs related to early work on the power line infrastructure.
The company has noted the engineering work is the final stage before Nalcor will consider a final power agreement with Alderon.
“Alderon commenced Nalcor’s formal process for the provision of power to an industrial customer in Labrador in September 2011 and we are very pleased to now be in the third and final stage of the engineering and assessment process,” stated Alderon president and CEO Tayfun Eldem.
“The third stage of the process will lead to the completion of detailed engineering and will also mark the start of the formal negotiations towards a mutually acceptable Power Purchase Agreement.”
The company expects to start negotiations on a power purchase agreement as the engineering work is completed.
The construction of power infrastructure, including transmission lines, to service the mine will require regulatory approval, including environmental assessment.
“The commercial terms and rates for power, transmission and other infrastructure costs will be governed by a Labrador Industrial Rates Policy Framework,” the company stated.
That framework has yet to be enshrined in legislation. The industrial rates policy is still before the House of Assembly.