First, the CN Rail study of a $5 B rail line to Labrador is put on ice. Then the giant $6B Baffinland ore project in Nunavut is scaled back to one eighth its original size. Now London Mining is delaying its $2.5 B Isua iron ore project in Greenland.
London Mining had planned to put an access road, airstrip and port infrastructure for the mine in place by September 2012, followed by construction of the plant and mine by May 2013, with a with a production start-up in early 2015. Plans called for the Isua mine to ship out 15 million tonnes of iron ore concentrate a year over 15 years — three million tonnes a year less than Baffinland initially planned to ship out every year from Mary River over the project’s former 21-year lifespan. Throughout the year, giant 250,000-tonne tankers would bring Isua’s iron pellets to buyers around the world. Now the company simply states it is planning to get the permitting process complete by 2013 and that plans for construction are on hold.
The factors for the decision would include:
The recent commodities boom had triggered much interest in iron ore developments in the north. However, weakening demand increases the project risk and places the business cases in jeopardy.
The Isua project needs real economic recovery to find its legs.