Thomson Reuters






* Firms are developing projects in region rich in iron ore


* New rail line could help control transport costs


Feb 11 (Reuters) - Shares of junior miners with projects in
Canada's Labrador Trough fell on Monday, after Canadian National
Railway Co hit pause on its plan to build a new rail
line in the region.


CN, Canada's biggest railroad, said late on Friday it had
halted a study into the feasibility of building an 800-kilometer
(500-mile) line to connect the isolated region to port.


The Labrador Trough, a geological formation extending
south-southeast through Quebec and Labrador, is home to vast
deposits of iron ore, the main component of steel. But a recent
slump in the benchmark price for iron ore <O62-CNI=SI> has
jeopardized the viability of projects in the sub-Arctic region.


Two rail lines already exist in the region, but their
capacity is insufficient to meet demand from planned new mines.


Stretching from the Port of Sept-Iles on the St. Lawrence
River to north of Schefferville, Quebec, the proposed new line
could help keep a lid on transport costs.


CN said back in July it might shelve the plan unless more
miners committed to using the proposed rail line. In August,
five miners agreed to help pay for the study along with CN and
its partner, Caisse de depot et placement du Quebec - the Quebec
pension fund.


The railroad operator said on Friday it is halting the
study, as miners are delaying projects. The news hurt shares of
early-stage Canadian iron ore miners.


Century Iron Mines Corp, which is developing the
Attikamagen Lake iron-mine project near Schefferville, was down
1.8 percent at C$0.54 on the Toronto Stock Exchange on Monday.
Century's partner, Champion Iron Mines Ltd, fell 5.1
percent to C$0.47.


Alderon Iron Ore Corp, also developing projects in
the region, fell 2.1 percent to C$1.42. Labrador Iron Mines
Holdings Ltd was down 4.5 percent at C$0.85.


Cliffs Natural Resources Inc, a larger producer that
helped finance the feasibility study, was little changed, up
0.03 percent at $36.50 in New York.