Quebec's Côte-Nord Sees Massive Economic Development from Increased Iron Ore Demand

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The increasing global demand for steel is driving billions of dollars in investment in iron ore mines and port facilities in Canada. In particular, northern Quebec and Labrador are home to a great deal of iron ore mine construction and expansion projects. In turn, the nearest available shipping locations, located in Quebec's Côte-Nord region on the Gulf of St. Lawrence, are in the process of preparing rail and port expansions for the increased tonnage to be shipped. In addition, plans are being made to construct or modernize pelletizing plants located adjacent to the port facilities.

After a drop in demand for steel during the global economic crisis that began in 2008, steel demand and production are very much on the rise again, being driven in large part by the rapidly growing economies and infrastructure construction in countries such as China and India.

Iron ore producers and steelmakers wanting a more integrated supply chain are jumping at opportunities to construct grassroot mines and expand existing mines. One of the locations seeing a tremendous amount of investment is eastern Canada, where giant global players and smaller producers are racing to expand production. Companies such as Rio Tinto plc (NYSE:RIO), ArcelorMittal (NYSE:MT) and Tata Steel Limited are investing heavily in the iron-rich area on the northern Quebec-Labrador border to have their own steady supplies of iron, making these companies less vulnerable to price fluctuations in the international iron ore market.

As an example, Cliffs Natural Resources Incorporated (NYSE:CLF) (Cleveland, Ohio) is under way with the Phase II expansion of its Bloom Lake iron ore mine near Fermont, Quebec, which will double the mine's annual production capacity from 8 million tons per year to 16 million tons per year of iron ore concentrate. A Phase III expansion, which will increase capacity by another 8 million tons per year is in the planning stages.

In northern Quebec, Adriana Resources Incorporated (TSV:ADI) (Toronto, Ontario) plans to develop one of the world's largest magnetite production projects, which aims to produce 50 million tons per year over three phases of construction.

The Canadian branch of Indian steelmaker Tata Steel Limited (BSE:500400) (Mumbai), along with partner New Millennium Iron Corporation (TSX:NML), is performing grassroot construction and expansions of existing mines at its Quebec assets. Iron Ore Company of Canada (IOC) (of which Rio Tinto is the majority stakeholder) is planning a three-phase expansion of its iron ore mines, ultimately aimed to increase production from the current 18.4 million tons to 50 million tons per year.

The actual extraction of the iron ore is only one part of a larger equation, however--the other large variable being transportation and shipping of the product. While there are many smaller lakes and rivers in the area of the mines, the nearest port facilities capable of large shipments are on the Gulf of St. Lawrence, which provides shipping access to both the Great Lakes area of the U.S. and the Atlantic Ocean for international markets. The region's largest port is located in the city of Sept-Îsles, on the Gulf of St. Lawrence. Sept-Îsles (which also happens to be home to North America's largest aluminum smelter) is itself preparing for a great deal of industrial development in relation to the mine expansions. Other rail and transport projects are being planned to move the iron ore pellets and concentrate to port facilities. There are several parcels of land located near the Sept-Isles port that are prime areas for industrial real estate development, including 5,000 acres being offered by Seven Islands Development Corporation. For details, see related story - Seven Islands Development Corp. Offers Opportunity for Industrial Firms Looking for Port Access and Infrastructure in Sept-Iles, Quebec.

The Port Authority of Sept-Îsles will begin construction on a new $220 million multi-user dock in August of this year. The dock will be 450 meters long with two berths and will be able to cater to the world's largest barges. The iron producers themselves are also getting into the game.

Adriana Resources is planning a massive $3 billion-plus rail transportation system to Sept-Îsles, as well as a shipping port in the city, valued at approximately $800 million. Tata Steel is considering using cutting-edge technology to deliver iron slurry by pipeline to Sept-Îsles. The company is performing economic evaluation on the construction of a pelletizing plant and port facilities in the city. The pipeline and pelletizing/port projects have a combined value of approximately $3.3 billion.

These are only a handful of the projects related to iron ore that are being developed in Quebec's Côte-Nord region. As one can see, the massive expansion in iron ore production is driving tremendous investment in the area, at both the mines and the port facilities. The Sept-Îsles Economic Development Council estimates that the city will have 1,500 new households in the next three years, and that over the next 15 years, 3,600 new jobs will be linked to iron ore manipulation in the area, in addition to thousands of indirect jobs. Residents are experiencing exciting times, as this remote port city stands on the brink of unprecedented economic development.

View Project Report - 300032912 300032915 300032922 64000187 64000198 64000210 300043052 60002102 60002103 300007150 300056779

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.