While Canadian iron ore projects are delayed or scaled back, London Mining’s giant Isua project is set to proceed.
In the last few months the CN Rail study for a new rail line into the Labrador Trench was put on ice and the $6B Baffinland Mary River project scaled back to less than $1 B. Meanwhile in Greenland, London Mining has completed of multiple studies under a mining licence for its Isua project. Located 150km north east of Nuuk and 110km from a proposed deep seawater port, Isua could produce a premium quality 70% Fe pellet feed concentrate with low impurities at a rate of 15 M tonnes per annum. The site also benefits from its position in the warmer south west corner of Greenland which allows for year round shipping should the mine be developed. The project plan envisages a slurry pipeline to tidewater.
London Mining has completed a feasibility study, but still requires regulatory approval and $2.5 B in project financing. The permitting is expected to be approved this year and construction to start in 2014.
Some 2,000 Chinese workers are expected to flow in for its construction. Anti-Chinese rhetoric from politicians is also rising. The main opposition leader, Aleqa Hammond, has threatened to revise a law allowing Greenland to import cheap Chinese labour to help build mining projects. Interestingly, President Hu Jintao - leader of the world’s most populous nation - paid a three-day visit to Denmark, last year. It was a visit that many observers said was chiefly about a stake in Greenland.
The Isua project would support 450 local jobs over a 15 year mine life, an attractive proposition for a populace seeking economic opportunities. London Mining has spent about $65 M on the Isua project so far.
London Mining is headquartered in London and listed on the London exchange. The company has assets of $500 m and operates a mine in Sierra Leone.
It is interesting that Greenland public opinion has moved so far in the direction of mining development. The contemplated use of Chinese labour is unusual, while attracting Chinese capital is common.
The demand for iron ore in China is such that projects in the north are coming to fruition.