Dean Journeaux and Bob Martin, along with the other founders of LabMag Mining Corp. (LMC), acquired claims in Labrador and Quebec in 2002, and leapt into
the iron ore industry. This came just before markets improved, driven by demand from emerging Asian economies, so the timing was good. Now known as the
Millennium Iron Range and held by New Millennium Iron Corp. (NML), the acquisitions have enormous potential.
The company started small, but Journeaux – now president and CEO of NML – helped establish a strategic partnership with India’s Tata Steel Limited, one of
the world’s largest steel producers and now its biggest shareholder. They created Tata Steel Minerals Canada (TSMC) to take advantage of NML’s direct
shipping ores (DSO). In September, TSMC celebrated its first DSO project shipment from Sept-Iles, Quebec, to Tata Steel Europe. It was a major milestone
for New Millennium. Journeaux and his team have big plans for the 210-kilometre-long Millennium range that should keep them busy well into the future.
CIM: What attracted you to this opportunity and how did it come about?
Journeaux: Bob Martin [former president and CEO] became aware that iron ore claims in the Labrador Trough had become available in early 2002, and he worked
with me and a few others in the belief that a crunch in iron ore markets would come at some point. We then set up a capital pool company, NML, and did
desktop studies on several projects before deciding to qualify the LabMag project held by LMC [one of several taconite deposits in the Millennium Iron
Range]. We knew we needed a partner and talked with potential parties from all over the world before making our agreement with Tata Steel. Our team has
extensive iron ore experience. We know the market and the ore bodies. We’re lucky to have that knowledge, as business was bad in the 1980s and 1990s,
resulting in a vacuum of industry experience. You won’t find many people in their 50s in this business.
CIM: Describe the relationship NML has with Tata Steel, as this company is integral to your business. Is there anything unique in working with that
Journeaux: When we looked for a partner, we concentrated on users that need captive supply. We know the big iron ore companies prefer higher grade ore
bodies close to Asian markets. Ours are lower grade compared to others in Brazil and Australia; our ores are harder and require a lot of grinding, and
we’re 600 kilometres from the ocean. On the other hand, we’re closer to Europe and the United States. Tata Steel was a good fit for us because they are the
second-largest steel producer in Europe, but with zero captive [iron ore] supply.
CIM: How has your four decades of experience with other companies and working in other countries translated to New Millennium Iron?
Journeaux: I started with Quebec Cartier Mining and later MET-CHEM Canada, U.S. Steel subsidiaries, and worked all over the world, including India, where I
lived for a time. I got to know a lot about the global steel industry, and that’s a real advantage.
CIM: Your company recently reported the first shipment of product from the DSO project. Where do you see this project and the company in five years?
Journeaux: DSO production could reach the rate of six million tonnes per year in 2015, and perhaps as high as eight million tonnes in five years. That’s
the objective, and TSMC has the resources to do that. The taconite deposits [LabMag and KéMag] are at the feasibility stage. This will be a huge project at
$5 billion, estimated in 2010, or more now. We’re working with Tata Steel, which has agreed to arrange the bulk of financing, and expect to release a study
shortly. We are also looking at other partners to help de-risk it and arrange off-take agreements.
CIM: The iron ore industry is dominated by giants. How do you fit in as a smaller company, and is there an advantage in being perceived as small, even as a
Journeaux: We may be small, but NML ranks roughly fifth in the world in terms of iron in the ground [in the Millennium Iron Range], and that’s an
advantage. The big guys have big resources and big production but will run out of ore sooner or later. We have the potential for a hundred years or more,
and that’s the kind of life people will be looking at long term.
CIM: Power and infrastructure are essential to this project and some improvements are proposed or in the works, including a new deep water dock at Pointe
Noire. Can you discuss those?
Journeaux: This new deep-water dock will be capable of handling the largest vessels plying the seas. When it’s completed early next year, we’ll be able to
ship product in larger vessels and extend our shipping range. We [NML and Tata Steel] have invested $50 million, or roughly 25 per cent of the total capex
for the project. As for hydroelectric power, we’re looking at separate proposals for LabMag and KéMag; we’re not sure which would go first. We haven’t
discussed rates, but don’t expect to be treated differently than other users.
CIM: What relationships have you established with local aboriginal communities?
Journeaux: The first agreement we made was with the Naskapi Nation to invest in the early stages of the LabMag project. They now have earned an ownership
of 20 per cent of LabMag. Later, we also negotiated four impact and benefit agreements for the DSO project. They form a large part of the project
employment. We spend a lot of time and effort with First Nations and local communities and are very involved in promoting education for young people. So we
have a strong relationship based on respect.
CIM: How have current capital markets affected the company?
Journeaux: We’re lucky that we raised considerable funding two years ago and have Tata Steel as a partner. We’re in good shape – we’ll need funding for the
taconite projects at some point – and we don’t foresee going to the equity market anytime soon.
CIM: Finally, how competitive is the company globally given that the previous operator of the DSO project was forced to close because of weak prices in
Journeaux: One advantage is producing a higher quality product upgraded to 69 per cent iron for taconite concentrate with very low deleterious elements.
The DSO has a natural iron content of 58 per cent or 59 per cent previously shipped without upgrading. TSMC is building an upgrading plant to reach at
least 64.5 per cent iron to meet market specifications. Another advantage is our potential to produce a range of pellet products, including direct
reduction grade pellets. We see the high-quality pellet market, especially for direct reduced iron, increasing over time and see that as our niche.