• by: Robin Bromby
• From: The Australian
• January 21, 2013 12:00AM

But this huge geological formation, with 78 billion tonnes of defined resources, has something Australian juniors lack: access to infrastructure. While most of the Pilbara transport infrastructure is owned by the three big players, common carrier railways either exist in this part of Canada or are to be built as part of a $US80 billion ($76bn) government investment. Port expansions are under way on a multi-user basis.

And there is cheap hydro-electricity from the Churchill Falls plant, which now supplies Quebec and Labrador. It has total generating capacity of a massive 5428 megawatts.

And big money. Already Wuhan Iron & Steel, Mitsubishi, South Korea's Posco, India's Tata Steel, China Steel and Hebei Iron & Steel are partnering projects.

Apart from the sheer flood of money available, what is significant is that it is mostly from Asia despite the obvious transport cost from the northern Atlantic seaboard of Canada.

Adam Lucas at London's Ocean Equities says in a report that the Labrador Trough -- which extends through northeastern Quebec into Labrador -- is flying under the radar with less than 4 per cent of the world's seaborne iron ore trade.

But all this is about to change and the trough will become a major force in the world iron ore sector.

Lucas points out the transport constraints which face the junior iron ore players in the Pilbara. In West Africa, many iron ore companies also face massive investments in rail and ports before they can begin exporting iron ore.

Existing iron ore production in the Labrador Trough goes out through two ports on the St Laurence Seaway.

A common carrier rail line runs from one of those ports, Sept-Iles, to Labrador City. Several other lines are being planned.

There's one Australian player there. Mamba Minerals (MAB) has one of the more early-stage projects with Snelgrove Lake, an iron formation with a strike length of 33km and about 200m wide. Lucas says the company will begin drilling on February 7 and will spend $C6.5 million ($6.25m) this year.

"The initial drill program will provide the market with an indication of the potential size of the deposit, which we believe is likely to be significant," he adds....

http://www.theaustralian.com.au/business/opinion/more-iron-ore-competition-as-canadas-labrador-is-unleashed/story-fnciihm9-1226557740354