Canadian iron project moves ahead

December 4, 2012

The construction phase of the openpit Mary River iron ore project in the Arctic territory on Nunavut won approval from Canada on Dec. 3.

The project could could help top steelmaker ArcelorMittal reduce its dependence on outside suppliers.

The Mary River project on remote Baffin Island was approved by the Minister of Aboriginal Affairs and Northern Development, based on the recommendation of the Nunavut Impact Review Board, Reuters reported.

“It’s a game changer for Nunavut and particularly for Baffin Island,” said Minister John Duncan.

The project “will bring infrastructure and much economic activity and many jobs to the area and, of course, revenues to government and to the Inuit organization,” he said, referring to the Inuit aboriginals in the region.

That said, Mary River - which could to produce at least 18 Mt/a of iron ore over a 21-year mine life - is still years away from production, if it ever gets off the ground.

The project needs its project certificate and a water license before work can proceed.

Baffinland Iron Mines Corp, the ArcelorMittal subsidiary developing the mine, also needs to finalize an impact benefit agreement with the local population.

Once all the pieces are in place, Baffinland will turn to its shareholders to make the call on whether construction will go forward. Arcelor holds a 70 percent stake in the company, with Iron Ore Holdings LP owning the remaining 30 percent.

Permitting the Mary River project has already taken nearly five years. It is expected to cost some $4 billion to build, including related infrastructure.

ArcelorMittal, which gained control of the project after a contentious bidding war in 2011, had been building up its iron ore division in an effort to reduce its dependence on top miners such as Vale SA, Rio Tinto and BHP Billiton.

The company is also in the midst of an expansion at its iron ore projects in the province of Quebec.

Situated above the Arctic Circle, Mary River is one of the most isolated mining projects in the world. Temperatures at the site regularly dip below minus 30 degrees Celsius, and there is 24-hour darkness from November to January.

Critics of the project say the mine is simply too ambitious to work in such an inhospitable environment.



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