Canadian iron-ore mining company Champion Iron announced a final investment decision (FID) for its direct reduction pellet feed (DRPF) project at the Bloom Lake iron-ore complex, in Quebec.
The FID secures the $470.7-million project’s expected commission in the second half of 2025, CEO David Cataford reported.
The carbon-neutral project positions the company and the region to contribute to the accelerating green steel transition, he said in a statement, noting the recent decisions by the governments of Quebec and Newfoundland and Labrador to include high-purity iron-ore on their critical mineral lists.
Direct reduced- (DR-) grade quality iron-ore is a niche product in the iron-ore industry, representing about 5% of global seaborne iron-ore production. However, owing to its higher iron content and lower impurities, pricing for DR-grade iron-ore, which is used as a raw material input to make DR-grade pellets, attracts a significant premium over traditional high-grade iron-ore.
The accelerating transition towards emissions reduction in steelmaking is expected to drive increased demand for DRPF products.
Not only will Champion now produce DRPF-quality product at Bloom Lake, but it is also planning for DRPF iron-ore at the nearby Kamistiatusset (Kami) project.
Announcing the outcomes of a feasibility study for Kami, the ASX- and TSX-listed company placed a $3.9-billion price tag on the project, which will produce an average of nine-million wet metric tonnes a year of DR-quality iron-ore concentrate at above 67.5% iron over 25 years.
The study calculated an after-tax net present value (NPV) of $541-million and an internal rate of return (IRR) of 9.8% for Kami, based on conservative pricing dynamics compared with prevailing iron-ore prices.
Based on the previous three calendar year average of the P65 index price, the NPV surges to $2.2-billion and the IRR to 14.5%.
Champion stated that the completion of the study allowed it to evaluate Kami in relation to its portfolio of other organic growth opportunities. Before making an FID, the company would continue to fine-tune the project’s economics.
“The study enables the company to consider strategic partnerships prior to advancing the project, providing an opportunity to capitalise on the growing demand for green steel,” said Cataford.
Meanwhile, Bloom Lake produced a quarterly record of four-million wet metric tonnes of high-grade 66.3% iron concentrate, surpassing its expanded nameplate capacity.
The company recorded record December-quarter iron-ore concentrate sales of 3.2-million dry metric tonnes, up 23% from the previous quarter.
Champion said, however, that while Bloom Lake’s production capacity increased during the period, exceeding its expanded nameplate capacity, the rail operator did not haul at contracted levels. This shortfall resulted in the inability to ship all of the iron-ore concentrate produced during the period.
Further, rail service was interrupted for several days after heavy rains in late December.
Accordingly, iron-ore concentrate stockpiled at Bloom Lake increased by 0.8-million wet metric tonnes to 2.4-million wet metric tonnes during the three-month period ended December 31.
The company is engaging with the rail operator to receive contracted haulage services to ensure that Bloom Lake’s increased production, as well as iron-ore concentrate currently stockpiled at Bloom Lake, is hauled over future periods.