Iron: the forgotten commodity ore.

The price of iron pellets has skyrocketed over the past two years.

Quebec-based iron producers Quebec Cartier Mines and Iron Ore Co. of Canada saw the price of iron pellets and concentrate rise by 21.2% and 22.33%, respectively. Worldwide prices for these two products reached historic highs in 2004 and, in response to the increases, many mining companies, large and small, have shown a growing interest in iron exploration.

In Quebec, most of the unmined iron deposits evaluated between 1950 and 1980 are held by junior mining companies.

A quick calculation of geological resources, based on the province’s mineral deposit records, indicates that the province has an inferred resource exceeding 2 billion tonnes of iron ore. However, about 20 deposits have a grade of more than 30% iron, with tonnage in excess of 100 million tonnes. Nearly half these deposits are in the area between Fermont and the Manicouagan reservoir in northeastern Quebec. The sector north of the Labrador Trough (more specifically, north of Baie-aux-Feuilles, Que.) also contains several major deposits. The Great Whale and Duncan iron deposits, near James Bay, and Albanel Lake, are also significant. (It should be noted, however, that the mineral resources of these deposits were assessed in the 1960s, prior to the implementation of National Instrument 43-101.)

Companies planning to develop an iron deposit must first examine several factors, such as the following:

q market trends in the medium and long term — The iron market is cyclical and highly sensitive to changes in global economics, not unlike the price of oil and gas. (see related story on page 5)

q proximity to infrastructure — Deposits that are far away from roads and rail lines face escalating costs if new infrastructure is needed for the transporting of iron concentrate and pellets.

q tonnage and grade — Though metamorphic iron deposits are interesting in terms of grain size and local concentrations of iron-oxide-rich horizons, the waste-to-ore ratio is generally high. In-depth structural studies are necessary to understand the shape of the deposit and reduce the waste-to-ore ratio. Mining such deposits requires that the iron ore be concentrated, which incurs higher production costs than those associated with the large iron-rich deposits of Australia and Brazil.

q labour and operating costs — In Canada, these are generally higher than in either Australia or Brazil. To be competitive, iron-mining companies in Quebec and Labrador are taking steps to reduce these costs.

Ongoing exploration

Exploration for iron and titanium deposits and the mining of ilmenite deposits have been going on for a hundred years in Quebec. The development, in the 1940s, of blast furnace fusion technology made it possible to produce almost pure iron and a slag in which titanium and undesirable elements were concentrated. Following these developments, exploration for ilmenite (and hemo-ilmenite) deposits flourished. The development of a purification process for the slag led to the creation of synthetic rutile, which has undergone spectacular development over the past fifty years and become one of the most common mineral commodities in our lives (synthetic rutile is used mostly in titanium-dioxide pigments, titanium metal, Fiberglas and chemicals).

The prospects for growth of the synthetic rutile market have been evaluated at 2% per year. However, because the growing Chinese economy has led to a price increase, the titanium pigment market will also be expanding more rapidly over the coming years. These new prospects for the synthetic rutile market are revitalizing exploration for iron and titanium deposits in Quebec.

Iron and titanium mineralization is typically observed in anorthositic and ultramafic intrusions. The mineralization consists of ilmenite and hemo-ilmenite associated with magnetite (which is sometimes titanium-bearing), spinel (hercynite) and, locally, apatite, rutile, iron and copper sulphides, and silicates. Major mineral resources of ilmenite and magnetite occur in the form of heavy-mineral-rich layers known as black sand.

Apart from the size of showings and the presence of ilmenite and magnetite, geologists or prospectors must take several criteria into consideration in evaluating an iron and titanium showing.

For titanium showings, prospectors must consider the type of ilmenite: hemo-ilmenite, ilmenite with hematite lamellae, ilmenite with magnetite lamellae or pure ilmenite. They must also consider the TiO2 grade of the ilmenite and of the rock, and the presence of undesirable elements, which must be below the 2% mark.

There are huge areas left to explore in Quebec. In addition to certain anorthosite massifs, such as the Morin and Saint-Urbain, which have been explored intensively in the past, the northern part of the Havre-Saint-Pierre Anorthositic Suite is a prime target. Once the road leading to the future hydroelectric generating stations of the Romaine project has been built, new areas will become accessible at a lower cost. A study of the nature of known iron and titanium mineralization in the Lac Saint-Jean Anorthositic Suite could also reveal ilmenite reserves.

— The preceding is an edited version of a paper by geologists Abdelali Moukhsil and Serge Perreault, with help from ric Grgoire of the Quebec Ministry of Natural Resources.