The Canadian National Railway (CN) announced in mid-February 2013 that it has suspended a feasibility study for the construction of a proposed rail line and terminal handling facility to serve the northern Labrador Trough of Québec and Labrador. The feasibility study was initiated last August by CN and its partner La Caisse de dépôt et placement du Québec (the “Caisse”), along with a group of six mining companies (E&MJ, September 2012, p. 10).

The CN announcement said the study had been progressing steadily; however, current market realities have resulted in anticipated delays to mine development projects in and around the Labrador Trough. A joint review of the project with the mining companies indicated that mine construction schedules and diverging needs for each individual project would make it difficult to obtain the critical volumes of iron ore necessary to support the building of new rail and terminal infrastructure by CN.

CN also said decisions by some miners in the region not to join the group of mining companies supporting the CN infrastructure project were also a factor in the much-lower-than-projected iron ore volumes that are now expected to be shipped in the foreseeable future.

Luc Jobin, executive vice president and CFO of CN, said, “We have invested considerable effort and resources towards the feasibility study, but in light of the circumstances, CN has concluded that it is not advisable to continue with the feasibility study at this time.”

Three of the iron ore development companies participating in the CN study—Champion Iron Mines, New Millennium Iron, and Alderon Iron Ore—issued follow-up statements to the effect that suspension of the rail study would not impact their plans for their projects.

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