Champion Iron | Hope for the old pellet plant in Pointe-Noire

(Sept-Îles) Nearly a decade after closing its doors, the old pellet plant in Pointe-Noire, in Sept-Îles, should return to service after a facelift costing several hundred million dollars that Champion Iron – the operator of the Bloom Lake iron mine – wishes to offer him.

Julien Arsenault
The Press

There are still several steps to go, but the company unveiled its game on Tuesday before inaugurating the second phase of its mining site, a project that provides for the storage of mine tailings in several lakes on the North Shore.

Parent company of Quebec Iron Ore (MFQ), Champion has reached an agreement to acquire the plant which had been taken over by the Pointe-Noire Railway and Port Company for 2.5 million. The company will share the costs of a feasibility study with a steel giant, whose identity has not been revealed, in order to have an idea of ​​the sums to be invested.

“The plant needs a little love,” said Champion CEO David Cataford at a press conference in Sept-Îles. “We are talking about several hundred million dollars to perform the update. We are not talking about market research. This is to get an idea of ​​the costs in order to prepare the project. »

The project was presented with the Minister of Economy and Innovation, Pierre Fitzgibbon, his colleague in Energy and Natural Resources, Jonatan Julien, and Mike McKenzie, Chief of the Innu community of Uashat- Maliotenam.

To make iron pellets, the ore must be processed to increase its iron content. For Champion, processing would be in addition to mining. These pellets are then transformed by steel mills. On the North Shore, ArcelorMittal also operates a pellet plant in Port-Cartier.

The announcement was welcomed by investors. On the Toronto Stock Exchange, Champion’s stock rose $0.39, or 6.4%, on Tuesday to trade at $6.53.

New out of old

Champion would rather buy the plant that once belonged to Cliffs Natural Resources – which opened in 1965 – than build a new one. The site houses “good infrastructure”, such as a crusher and other equipment “which is quite expensive”, explained Mr Cataford. The feasibility study should be completed towards the end of 2023. The relaunch of the site could occur the following year or in 2025.

If the project sees the light of day, the operator of the Lac Bloom mine would like to process 6 million tonnes of ore at the pellet plant. We also want to leave out “heavy oils” to power electric arc furnaces, which would reduce greenhouse gas emissions. Electricity, natural gas and other renewable energy sources could be part of the solution.

The American company Bedrock Industries had been identified as a potential buyer in 2019, but the transaction had not materialized. Why would this time be the right one?

“We have high-quality iron ore,” replies Mr. Cataford. Those who were interested had to find a way to buy iron. We own our resource and we exploit it. »

The financial arrangement of the project has not been specified. On several occasions in the past, the Quebec government has supported Champion. Investissement Québec (IQ), the financial arm of the Québec state, is Champion’s second largest shareholder with an 8.4% stake.

In addition, profitability is at the rendezvous for the company, which had reaped net profits of 407 million after the first nine months of its fiscal year.

“A society that has its way, that has demonstrated its credibility, generally does not need government,” said Mr. Fitzgibbon. We are open to participate. It must be admitted that when the markets are able to finance the project, the government can take a step back. »

At Laurentian Bank Securities, Jacques Wortman sees Champion’s ambitions favorably, even if the cost of the project is still unknown.

“The plant benefits from a strategic location, close to the deep-water port of Pointe-Noire and rail infrastructure, writes the analyst in a note. It will require a lot of work and investment. »

Controversial expansion

The second phase of the Bloom Lake mine site will allow Champion to increase annual ore production to 16 million tonnes. Despite an unfavorable opinion from the Bureau d’audiences publiques sur l’environnement (BAPE), Quebec had authorized the expansion of the mine.

A financial compensation of 20 million had been demanded from the company for the loss of fish habitats and wetlands.