Mark Szakonyi, Associate Editor | Aug 10, 2012 1:46PM EDT
A group of mining companies have agreed to work with Canadian National Railway to move forward on plans to build rail line in northern Quebec, the railroad said on Friday.
The effort to build a line for iron ore exports will be dropped if more companies don't join the railroad on the project, President and CEO Claude Mongeau said during a second quarter earnings call. The project would require the construction of at least 310 miles of line to connect the Port of Sept-lles to the northern mining region. The exact length of the line and cost, which ranges from $3 billion to $6 billion, depends on how many mines take part in the project.
Cliff Natural Resources, Larador Iron Mines Holdings New Millennium Iron, Cap-Ex Ventures and Alderon Iron Ore agreed to work with the railroad on a project feasibility study. Labrador Ore Mines previously agreed to work with CN, Mongeau said.
“CN will work closely with mining companies in the group and the Caisse to determine the best design and right timing for the development of rail infrastructure to tap the significant iron ore production potential of the Labrador Trough in northern Quebec and Labrador,” Mongeau said. “As North America's largest hauler of iron ore pellets, CN is well positioned to respond effectively to the needs of our customers in this market and to do so in a sustainable and economically viable way.”
CN's shipments of metal and minerals rose 1 percent year-over-year in the second quarter and 6 percent in the first half of the year. The segment generated $294 million in second quarter revenue, up 9 percent year-over-year, and accounted for about 11.5 percent of CN’s total revenue.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.
