"NML’s Millennium Iron Range contains well over 25 billion tonnes of ore which allows large scale production for a century or more.  Logistically, New Millennium is in a great location, as there is a railway that leads directly to within 50km of the site. Along with this, NML has a share of the Deep-Water Port, where the largest ships in the industry can dock at Pointe Noire (Sept-Iles)."

Dean Journeaux

COFOUNDER AND BOARD MEMBER, NEW MILLENNIUM IRON (NML)

February 25, 2019

What have been the major developments at New Millennium Iron (NML) in recent years?

A pre-feasibility study was issued in 2016 for NMI’s latest Taconite project, NuTac.  NML initiated this project because there was a need for something less capital intensive and smaller in production to meet the needs of the market. NML’s previous projects, LabMag and KéMag, were designed to produce 22 million mt/y of saleable product and cost approximately CAD7 billion each in 2014. NuTac will produce 8 to 10 million mt/y and has an approximate cost of CAD3 billion in 2016. Along with this, we have a partner, Tata Steel, which owns 26% of NML’s shares and has participated in the KéMag and LabMag Feasibility Study. NML also has seven other properties that are totally owned by NML. One of the key features of NML’s iron ore is its concentrate grade, 67% Fe, with very low alumina and other deleterious elements which commands a premium in the market and is vital for steel industry performance. NML was the first private investor in the new deep-water dock at Pointe Noire, which is now operating. It positions NML to ship in very large vessels.  Recently NML sold 6 mt/y of its capacity to Tacora Resources.

Is NML currently looking for partners to help bring NuTac into production?

The NuTac project is ready, however some might think the right time for the market is not there yet. Major banks and experts forecasting iron ore price projections have been saying the same thing for many years; that there will be a dip in the prices of iron ore a year or two in the future. This has not happened so far. China has now recognized the environment and cost advantage of using the highest quality ore.  With grades as high as NMLs at plus 67% Fe, the steel plants air quality is improved. There are three markets: high grade includes pellets, medium and low grade. We are seeing increasing demand for the higher quality grade ore with the soaring price premium. This has not yet been recognized by investors, but in time it will become known and we will have many people coming to NML. In China there is growing scrap steel availability that is valuable as it contains up to 99% iron. However, China needs to develop a stronger scrap collection system to obtain higher quantities and better quality.  Steel producers using higher grade ore are able to produce more tonnes of steel from the same facility capacity, whilst improving the environment.

Can you tell us about NML’s direct shipping ore (“DSO”) project?

NML entered the iron ore market through participation in a DSO project operated by Tata Steel Minerals Canada. We initially began with a 20% interest in the company, however, over time, the investment cost went up and we could not sustain it. NML’s interest now is at 4.6%. The project has been in production for four years now and producing about 3 million mt/y. TSMC’s average DSO grade is over 60%. However, they have an upgrading plant, which will go into operation soon and increase the grade to over 64.5% Fe, allowing them to take advantage of the market price for higher grade premium.

What is the current financial position of NMI?

Things are looking good: NMI now has approximately CAD16 million of cash or cash equivalents and its running costs are low. NML is looking to do more joint ventures. It is true that the market attitude is not particularly positive now, however that is due to investors’ lack of understanding of the complexities of the iron ore market.

What are do you think would make for a more favorable mining climate in Quebec?

I believe the promotion and real-life commitment to CSR is crucial. We are a company that takes CSR very seriously, and actively promote women in mining and First Nations people. The Fist Nations own 20% of NML’s LabMag property and we foresee that in time, a member of the first nations will eventually be at the helm of the company.  NML’s founder, Robert Martin, believed this very strongly. The First Nations population live in the immediate area within 50km of the mines. This forms a local pool of people who want to live and work in the area.

A challenge is the permitting process. The first step is to produce a project notice, which is then followed by the environmental assessment process. From there, obtaining a permit to start construction will take a total of four years. On top of this, time will be needed to complete financing and tackling other unforeseen challenges. The construction period is another three years. However, the market for high quality ore is solid and improving.  Usually companies mine their best tonnes of ore sooner than later in this long process. So, the best tonnes were mined yesterday, which is not NML’s case. The biggest players are Rio Tinto, which is mining at 400 million mt/y, Vale, with 400 million mt/y, and BHP Billiton with 275 million mt/y and so their highest-quality resources are depleting quickly and will need replacement. What sets NML apart is its enormous resources, top product quality, iron ore knowledge and understanding the short and longer-term market focus that a project needs to have in order to be successful.

Do you have a final message for the readers of Engineering & Mining Journal and Global Business Reports?

NML’s Millennium Iron Range contains well over 25 billion tonnes of ore which allows large scale production for a century or more.  Logistically, New Millennium is in a great location, as there is a railway that leads directly to within 50km of the site. Along with this, NML has a share of the Deep-Water Port, where the largest ships in the industry can dock at Pointe Noire (Sept-Iles). These ships can hold 400,000 tonnes or more and reduce ocean shipping costs to Europe, the Middle East and Asia. NML can produce high quality low alumina concentrate, blast furnace pellets and pellets for direct reduction that can match the best there is to offer on the market. Quebec and Newfoundland and Labrador are also excellent places to be doing work, with support from its experienced workforce, political stability.  Governments will come to realize and mitigate the problems that projects face in terms of the delays in environment approvals and permitting.  Other positive factors should outweigh the above and investors and off-takers should rest assured that at the end of the stretch, the profits will be most rewarding and worth waiting for.

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