Canadian short line lands mining contract
Written by William C. Vantuono, Editor-in-ChiefLabrador Iron Mines Holdings Ltd. (LIM) has announced a “life of mine” Confidential Rail Transportation Contract with Quebec North Shore and Labrador Railway Co., Inc.
QNS&L, a wholly owned subsidiary of Montreal-based Iron Ore Co. of Canada, will transport iron ore from LIM’s Emeril Junction, Newfoundland and Labrador, facility to Sept-Iles Junction, Quebec. QNS&L already carries iron ore for its parent company.
LIM will provide the railcars needed, with QNS&L supplying the locomotives power; LIM has agreed to make an initial advance payment of C$5 million to QNS&L to secure the locomotive equipment and infrastructure capacity to meet LIM’s service needs under the contract, with an additional $20 million in installments at later intervals. QNS&L will eventually repay the amount by means of a special credit of $3.50 per metric ton against all tonnage hauled, commencing July 2012, until all advance payments have been repaid in full.
LIM Chairman and Chief Executive John Kearney said, "Signing of this rail transportation agreement is a significant milestone in the development of our Schefferville Area iron ore projects in western Labrador and northeastern Quebec, and we look forward to a long term business relationship with QNS&L, the major rail transport operator of most of the iron ore in the Labrador Trough.”
