Building an iron ore mine in the arctic will be costly
Reuters catalogues some of the challenges to develop the Mary River iron ore deposit:
“Iron ore’s not like gold. A little bar of gold is worth a huge amount of money, you can just fly it out,” said BMO Capital Market analyst Tony Robson. “But iron ore means lots of trains, lots of wagons and a really big port.”
It can cost as much as $5 million to build a kilometer of rail line, and that’s just for starters. Add to that hundreds of million of dollars for a port and the equipment to move the ore from rail cars to storage to the waiting ships.
Then there are the ships themselves, 10 Class 3 bulk carriers, each one as long a three NFL football fields and capable of navigating the icy waters of the Hudson Strait, between Baffin Island and northern Quebec, year round.
It all adds up to billions of dollars — a mind-boggling sum for a company valued at just C$590 million ($597.9 million) in the latest bid from Nunavut and ArcelorMittal.
The board of directors for Baffinland Iron Mines approved a joint takeover by ArcelorMittal and Nunavut Iron Ore Acquisition Inc. in mid-January.
Mary River is on the north end of Baffin Island in Nunavut. Put another way, the project is 3,000 km north of Toronto.