Published on May 16, 2017 in The Telegram
Against the backdrop of improving iron ore sector fundamentals, the reboot of the Kami Project marks the next chapter in Newfoundland and Labrador’s rich history of resource development.
Mining is in the DNA of this province. Its roots stretch back more than 4,000 years with the First Nations, who extracted chert, soapstone and other minerals to fashion tools and create artistic works. In the second half of the 19th century, Newfoundland and Labrador was at the centre of the global mining sector with the Tilt Cove mine growing to become the world’s sixth largest copper producer. Just as the copper boom waned at the turn of the century, a new resource — iron ore — was discovered. Despite the cyclical nature of the commodities throughout the 20th and 21st centuries, what has remained constant is the strength of both the geology and the people.
Today, the Labrador Trough continues to be one of the world’s most promising regions for superior quality iron ore. The high iron content of concentrates and pellets coupled with low deleterious elements makes steel less expensive to produce and more attractive for the global market. With clean iron ore in abundance, a highly skilled local workforce in place and access to international transportation routes, the region presents mining companies with a rare infrastructure-ready environment for project development. This perfect recipe for success is set against a backdrop of improving iron ore sector fundamentals with rising demand from the economic powerhouse of China and, it would appear, a resurgent United States.
It is in this context that Alderon’s Kamistiatusset (Kami) Project, which is strategically located next to the towns of Wabush, Labrador City and Fermont, is attracting so much positive attention from investors, consumers and miners here in the province, throughout the region, across the country and around the world. According to an independent Economic Impact Assessment (EIA) prepared by Strategic Concepts Inc. (SCI) and Wade Locke of Memorial University, Kami is strongly positioned for the next quarter-century. It is estimated that this project will require about 29 months of construction, and is expected to produce 182 million tonnes of iron ore concentrate over a 24-year operational period.
The EIA’s findings provide clear validation that Kami will have a significant economic impact in this province and beyond. In Newfoundland and Labrador, it is expected that Kami will create about 32,000 direct, and spinoff jobs, generate more than $2.2 billion in total income to workers and businesses, and contribute more than $1.8 billion in much needed revenue for the provincial treasury. In Quebec, particularly the Côte-Nord region across the border, Kami will generate $3.2 billion in income to workers and local businesses, bring about 42,260 person-years of employment, generate $459 million in treasury contributions, and add $3.2 billion to the provincial gross domestic product.
Kami is truly a national endeavour. From transportation to financial services and to professional engineering, its economic impact will be felt across sectors from the Atlantic to the Pacific. It will create 100,000 direct, indirect and induced jobs, as well as generate $7.6 billion in income to workers and businesses, $4.4 billion in total revenue for federal and provincial treasuries and $19.5 billion in GDP over a 26-year period, which includes two years of construction activities.
At a time when Canada is celebrating its 150th birthday, and with Newfoundland and Labrador just two years away from marking 70 years since joining Confederation, Kami is set to become a crown jewel for the province. It will bring jobs and vibrancy to our communities.
Alderon looks forward to working with the province and the Government’s recently announced cabinet committee on jobs to realize the potential of this exciting opportunity. In collaboration, we will find a way forward and together turn a page to the future of resource development in Newfoundland and Labrador.