Latest news with #KamiProject
CBC
21-02-2025
- Business
- CBC
$4B Labrador iron ore mine can't break ground without more housing, power, GM says
Social Sharing An iron ore mine in western Labrador is inching closer to becoming a reality, but the project's general manager says the lack of infrastructure and housing in the region may stymie the opportunity altogether. Kami Project general manager Kevin Foley says he expects the $4-billion mine to begin operating by 2030 at the earliest. The project still requires a feasibility study and an environmental assessment, then construction by 2027, if it's deemed profitable. He's estimating the mine's lifespan at 25 years. "We're really excited about the employment opportunities, to have a local workforce," Foley said, noting the company intends to "work with the communities in Labrador and Newfoundland to make sure that we're maximizing the value for the province." The mine itself — owned by Australian company Champion Iron Ore — is poised to be the third in the Labrador West region. The site plans, Foley says, include a concentrator for ore processing, a crushing system and pit, and a railway connection to the Quebec North Shore and Labrador Railway. But a project that large needs fuel. Foley, who was among industry heads and politicians at this week's MINEx conference in Labrador West, was joined by other mining industry leaders who say they would require new, reliable power from Churchill Falls to operate. Without that extra infrastructure, Foley says Kami won't be possible. "To be very clear, we will rely on Newfoundland and Labrador Hydro to provide power for Kami," he said. And it's not just power, land and infrastructure the project needs to break ground. The 600-plus workforce the company anticipates will also requires its own human resources. "Now you're talking about an ecosystem," Foley said: one that includes warehousing, health care, and education. "Those parts of the ecosystem have to come." He insisted, after repeated questioning from a Radio-Canada reporter on Thursday, that the company prefers a local workforce as opposed to a cadre of rotational workers that will only reside in the area during their shifts. "That means that we need to put effort into — we all need to put efforts into — attracting and retaining the required people," Foley said. Housing a sticking point for mine Labrador West is currently facing a housing crunch, however, with no room in the near future for adding hundreds of new residents. "We understand that there's challenges and opportunities in the region today and around workforce, around infrastructure and housing," he said. "Our commitment is to work with the different levels of government and the other companies to make sure that those opportunities get addressed in a timely manner." Housing Minister John Abbott told CBC News on Friday there are almost no rental vacancies in Labrador West, with the region experiencing one of the worst housing crises in the province. "We are very concerned," Abbott said. In the long term, though, the minister says there's only one solution: working with mining companies to hammer out numbers and build new homes. "We need a master plan here," Abbott said. "What are your expansion plans? What are your requirements? And I think with the companies, with the towns and with the provincial and federal governments, to make sure we can accelerate new housing construction — that's the only solution that we see, and that is something that's going to take the time to put in place." The Kami Project's future depends on whether governments can help solve the housing and power problems in time, Foley says. "There's definitely risk ... with the resident workforce," he said. "We do have six years in front of us. A lot can happen in six years, but there is some risk that the infrastructure and the housing in the area won't be available for 600-plus new people to the community."
Yahoo
31-01-2025
- Business
- Yahoo
Champion Iron Ltd (CIAFF) Q3 2025 Earnings Call Highlights: Navigating Challenges with ...
Production: Over 3.6 million tonnes produced; just under 3.3 million tonnes sold. Revenue: Approximately $363 million. EBITDA: $88 million. Operating Costs: Approximately CAD79 per tonne delivered. Provisional Price Adjustments: Negative USD4 per tonne on 3.3 million tonnes sold. Cash Position: Decreased from $180 million to about $90 million. Dividend Payment: $52 million. Investment in Flotation Plant: Around $70 million. Net Debt Increase: $100 million associated with mobile equipment and lease financing. Realized Selling Price: Impacted by lack of long-term contracts and exposure to spot pricing. Warning! GuruFocus has detected 5 Warning Signs with CIAFF. Release Date: January 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Champion Iron Ltd (CIAFF) managed to produce over 3.6 million tonnes and sell just under 3.3 million tonnes despite a challenging quarter. The company reported no significant environmental issues during the quarter. Champion Iron Ltd (CIAFF) continued to strengthen partnerships with First Nations and Newfoundland and Labrador communities. The company achieved a record quarter in terms of waste mined and ore mined, indicating successful investments in mining equipment. Champion Iron Ltd (CIAFF) signed an agreement with Nippon Steel and Sojitz for the Kami Project, valuing it at CAD500 million, which will be funded by partners. An unplanned event at the load-out resulted in a 14-day halt, impacting shipping and sales capacity. The company faced a provisional price adjustment of USD4 per tonne negative on the 3.3 million tonnes sold. Operating costs remained high, with extra maintenance and re-handling of material contributing to costs. Champion Iron Ltd (CIAFF) experienced a significant cash reduction from $180 million to $90 million, partly due to high CapEx and dividend payments. The company missed EPS consensus forecasts due to a noncash impact from exchange rate changes affecting debt facilities. Q: The sustaining capital over the last two quarters seems elevated. Should we expect this trend to continue, or will it decrease? A: David Cataford, CEO: The recent high levels were due to investments in mining equipment and railcars, which are not typical. Moving forward, we expect sustaining capital to align more closely with the $60 million per quarter level, as outlined in our feasibility study. Q: Is the DRPF product intended for US customers, and what is the status of contract negotiations? A: David Cataford, CEO: Currently, the DRPF product is not intended for US customers due to their preference for pellets. We are targeting markets in the Middle East, North Africa, and Europe. Negotiations have been ongoing for over a year, and we anticipate signing our first contracts by October or November 2025. Q: Can you provide an update on the shipping run rate and stockpile reduction? A: David Cataford, CEO: If IOC's production is at the lower end of their guidance, we have flexibility to reduce stockpiles significantly this year. Even at the higher end, we can still start reducing stockpiles. We expect 2025 to be a good year for destocking, especially after winter. Q: What is the estimated cost of the Kami Project feasibility study, and how will it be funded? A: David Cataford, CEO: The feasibility study, including permitting and infrastructure improvements, is estimated at $60 million. This cost will primarily be covered by our partners, Nippon Steel and Sojitz, so Champion should not need to invest its own cash over the next two years. Q: How will the DRPF commissioning process unfold, and what is the current market price for DR-grade products? A: David Cataford, CEO: We plan to have two separate products initially, focusing on volume over quality. If the market remains as it is, we may blend products for an entry-level DR grade. Currently, DR pellet premiums are around $45, but there is no public pricing for DR-grade concentrate. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
