ArcelorMittal invests $2.1B in Quebec

ArcelorMittal (MT-N) is spending $2.1 billion to expand its Mont-Wright mining complex and Port-Cartier pellet plant near Fermont in northern Quebec. 

The expansion would boost the company’s annual iron ore concentrate production from 14 million tons to 24 million tons in 2013, which is part of a plan to grow its iron ore production to 100 million tons by 2015, said Peter Kukielski, the company’s head of mining, in a press release.  

ArcelorMittal, which accounts for 40% of Canada’s iron ore production, is also looking to double its iron ore pellet production from 9.2 million tons to 18.5 million tons, adding that the $2.1-billion investment would create 8,000 jobs during construction and more than 900 permanent jobs once the expansion is completed. 

Eric Tetrault, director of ArcelorMittal Mines Canada’s communication of public affairs, explains that the construction at Mont-Wright has already started, and will last for three years. “We’re expecting end of construction by 2014,” he notes, saying that the company is contemplating another pellet line at Port-Cartier, but has yet to confirm when construction will start.

ArcelorMittal, which is a leading supplier of iron ore to the global steel market, announced the expansion plan at the Mont Wright facility on May 20, during a ceremony attended by the province’s Premier Jean Charest, mayors of Fermont and Port-Cartier, and representatives from the local communities. 

Charest also attended an earlier ceremony in May to unveil Plan Nord, which makes ArcelorMittal’s expansion more attractive. 

Under Plan Nord, the Quebec government aims to invest $80 billion of public and private money over 25 years to build infrastructure and increase accessibility in the northern parts of the province. Plan Nord would also open up parts of northern Quebec for development of its natural resources, estimating that the plan would create roughly 20,000 jobs a year. 

Tetrault maintains Plan Nord would provide a favourable environment for the company, and was a “positive” factor in its expansion decision. 

 Positive effects of the plan, and ArcelorMittal’s investment, are also felt by some local businesses and contractors, which predict or have seen a recent uptick in services.

One such business is RCM Modular, based in St. Benoit Labre, Que., which designs houses, buildings, cottages and workforce camps for the mining industry. 

A local French paper, Le Soleil, wrote in April that RCM has been contracted by ArcelorMittal to build an upscale camp to meet the growing needs of the company at Mont Wright. 

“We are excited to participate in this large project in conjunction with SNC-Lavalin,” owner of RCM, Gilbert Trudeau, was quoted saying in French. “Our facility will house 800 miners.”

RCM director Geoffroy Tremblay told The Northern Miner in a phone interview that the company is working on an 800-person camp with a cafeteria and games room for the Mont Wright site. Tremblay added the camp would be completed in 6 months. 

As a result of the contract, about 40 new jobs would be created in the company, which has a workforce of 150.

Tetrault of ArcelorMittal adds that the company plans to work with some 1,200 contractors mainly from Quebec, and expects to generate $500 million in total business for them during the 3-year construction phase. 

Currently, ArcelorMittal at the Mont-Wright mining complex employs 1,100, but expects that number to grow to 1,600 by 2014.

 The mining complex includes: a large open-pit mine, an ore crusher and a concentrator, maintenance workshops, a storage facility and a train loading system. 

The mine at Mont-Wright has combined reserves and resources of 1 billion tonnes of crude ore with an average grade of 30% iron. The company says every 2.6 tonnes of crude ore produces 1 tonne of concentrate. 

Two-thirds of the concentrate is turned into pellets, the rest is either sent to the stockpiles or the port. 

ArcelorMittal’s expansion project still needs environmental and regulatory approvals.