We took some time to speak with one of our clients, a specialist in iron ore exploration and development to discuss the industry as whole, some of the challenges, and what we can expect from Canada’s North-East. 


According to  the most recent U.S. Geological Survey data,  Canada is among the top 10 producers in iron ore production.  with China, Brazil, and Australia among the top three,  Canada is ranked 9th with South Africa and the U.S. taking 7th and 8th place.  Still, Canada’s contribution to the Iron Ore industry is substantial and is expected to grow with Canada’s supply anticipated to increase 30 per cent to reach 52 million tonnes this year and 57 million tonnes in 2014.

The Labrador Trough region in Newfoundland and Labrador is a key player in iron ore and exploration and development projects.   The opportunities are extensive with a large number of exploration and producing projects on stream aiming to produce at least 1 billion tonnes.

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Figure 1 The Labrador Trough area (highlighted) Photo credit  http://www.beatthemarketstockpicks.com

Limitations and Forward Thinking

Even with the promise of yield and long term return on iron ore exploration and development projects,  challenges do present themselves. Much like other mining  initiatives, the iron ore industry has too felt the impact  of global mining trends, such as high costs and a lack of investment.  For many iron ore projects, remoteness and social implications also factor heavily into initial strategy.

Whether in the Labrador Trough area or in Northern Quebec, mining companies are challenged to be efficient, profitable, as well as sustainable. With sizeable investment required in infrastructure such as railways and seaports, criticism of the industry is often related to the energy requirements to develop sites and  ship iron ore from remote areas.

Although it can be agreed that a  great deal of energy is used in the development of the necessary infrastructure, it is important to consider that the construction of railways and seaports remain in place post-development and continue to add great value to local communities for years to come.  The presence of an existing infrastructure also supports smaller mining firms in their attempt to secure funding from global and strategic partners for iron ore exploration and development, as the bulk of the costs would then be related to other development initiatives rather than the cost of the initial infrastructure.

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Serving the Quebec and Labrador mining industry, The Port of Sept-Iles, Quebec it is the most important port for the shipment of iron ore in North America. Each year, approximately 23 million tonnes of merchandise, mainly iron ore, is handled, approximately 80% of which is destined for international markets. Photo credit:

Many mining firms also have the opportunity to benefit  from the region’s hydro electric facilities. Working with the hydro electric companies is an important and necessary alliance to secure long-term power, lower overall consumption and dependence on outside resources thus supporting sustainability and profitability. 

Skilled labour shortages have also affected iron ore exploration and development substantially. Although programs within local communities where projects are under way do alleviate part of the need to secure a local workforce, a FIFO recruitment approach to address the shortage of a specialized and skilled workforce continues to be necessary.  Community stakeholders such as Inuit communities,  are also considered to be essential to project success.

Considerations and Leadership

Any iron ore exploration or development  project  in the Inuit communities of Canada’s North have required companies to consider not only costs related to remote sites, but the local stakeholders themselves and their contribution to the projects.  An exercise in leadership, mining firms have committed to ensure that locals accept the project and are briefed along project lifecycles. Also significant, is to involve local stakeholders  and communities in project success by creating a local workforce, often done by introducing job training programs that expand upon transferable skills.   Community relations are also supported through investments within the community and open channels of communication among  all stakeholders. Over the long term, local communities are provided tools and resources that will surely benefit the industry going forward, potentially creating a sizeable local workforce for future exploits. 

The Future for  Iron Ore in Canada’s North

With the current downturn in mining overall, many exploration projects have difficulties in securing financing. There seems to be a wait and see attitude with some exploration projects less likely come to fruition as a result of a downturn in demand from countries such as India and China.   Should demand from foreign markets begin to increase, exploration may again pick up.  For Quebec mining firms who are in the advanced stages of their projects, the future seems a lot brighter. Mining companies that have reached advanced stages of development have focused  on securing  financing from long-term strategic partners with clear product specifications.  In such instances, return is seen over a longer period of time, rather than over the short term.

Canada’s iron ore industry has seen many changes and challenges. Remoteness and the lack of infrastructure have required mining groups to invest substantial amounts into an infrastructure that supports sustainability and process optimization over the long-term.  Leadership and community relations factor greatly into project success and reputation, and mandate companies to ensure that there is ongoing dialogue throughout the life cycle of all projects where local communities are implicated. Although exploration has slowed, projects further down the pipeline are best positioned to secure long-term financing. Despite these setbacks and challenges, success in iron ore exploration and development is looking forward to new growth in the years to come with Canada expected to become one of the top producers over the next decade.