A likely story

A likely story

All signs point to probable development of multi-billion-dollar pig iron plant in Belledune, N.B.

Maritime Iron Inc.’s pitch for a pig iron plant in Belledune, N.B. includes some large numbers. The Toronto-based development company says the $1.5-billion project (which would turn iron ore into pig iron, a key ingredient in steel-making) would create up to 1,300 jobs during the three-year construction phase and 200 full-time jobs when the plant is operational. Maritime Iron is predicting, over 30 years, a whopping GDP impact for Canada of $14.4 billion.

But Maritime Iron’s plans are years in the making and behind schedule. Overall, the project has been in development for five years, and it’s been more than a year since former New Brunswick Premier Brian Gallant touted it in advance of the 2018 provincial election. And yet, the provincial Energy and Resource Development Department says the plant proposal is “still in its infancy”.

It’s obvious Maritime Iron has presented a large egg. But will it hatch?

Maritime Iron’s pig iron plant, if built, would likely sit on NB Power land next to the utility’s Belledune generating station, close to Chaleur Bay in northern New Brunswick.

Iron ore from Quebec and Labrador would arrive at the nearby Port of Belledune and be processed at the plant, with the resulting pig iron shipped out to steelmakers in North America and Europe, supplanting pig iron imports from Russia, Ukraine and Brazil.

The company says its chosen technology (Finex, from South Korea) will not require hazardous materials or result in tailings, and will produce 1.5 million tonnes of pig iron ingots per year. (The province’s Green Party and Conservation Council both declined comment on Maritime Iron’s proposal).

The execution of Maritime Iron’s plan is, at best, many years away.

According to the province, the company’s proposal is currently in the pre-Environmental Impact Assessment registration phase. When Gallant announced the project in June 2018, construction was expected to begin in 2019 and the plant was to be operational by 2022.

Greg McKenzie, the company’s chairman and chief executive, now says construction could begin in the spring of 2020, with production to follow in late 2022 or 2023.

In an interview, McKenzie said the next steps involve securing the required permitting, obtaining construction financing and, then, starting construction. He said engineering studies are underway and the company is working with local unions to secure workers. He expects the Environmental Impact Assessment to start this fall.

“We would like to do it faster—as fast as we can—we’d love to get going,” he said of the project.

In a statement, Energy and Resource Development Minister Mike Holland said the government supports industrial development, “but it must be done in an environmentally sustainable manner”.

Belledune’s mayor, Joe Noel, said he doesn’t see any obvious hurdles. “There’s nothing there that we can see that would stop anything,” he said, reached at his home. “So it’s moving forward.”

Asked if the municipality backs the proposal, Noel responded: “Oh yeah, definitely.” The jobs are “much-needed”, he added.
As for concerns, Noel says there aren’t any. “It’s certainly going to be good for the community,” he said. “I’d be awful surprised if it didn’t happen, to be honest with ya.”

For Noel there’s another selling point: by-product gas from the plant could be burned at the neighbouring power plant, reducing its reliance on coal by more than 50 per cent, according to Maritime Iron and NB Power.

Gaëtan Thomas, NB Power’s chief executive, says the utility supports the project and is in discussions with Maritime Iron about the cost of the by-product gas, but doesn’t intend to become an investor. “There’s a lot of synergy possibilities and… it will depend on the business case. Is that by-product gas going to be competitive with our other options?” he said in an interview. “It’s got to be a good deal for our ratepayers.”

Thomas acknowledges the plant will increase New Brunswick’s greenhouse gas emissions. But he argues that people focusing only on that fact are “missing the point”. He says emissions in New Brunswick would rise, but the project would contribute to an overall drop in global emissions in two ways: by cutting the emissions associated with transporting iron ore to overseas plants (and the resulting shipments of pig iron back to North America), and through the use of lower-emission technology in the plant itself.
“People say the (emissions) for New Brunswick go up—it’s a problem. It isn’t a problem,” he said. “It actually helps climate change. We need to have a bigger view, not a myopic view of these things.”

Maritime Iron’s proposal appears to have wide—though not universal—support.

Mi’gmawe’l Tplu’taqnn Incorporated (MTI), whose members are the nine Mi’gmaq communities in New Brunswick, has not yet endorsed the project. In July, Maritime Iron entered a Relationship, Capacity and Indigenous Knowledge Study Agreement with MTI and two Mi’gmaq communities, Oinpegitjoig (Pabineau) and Ugpi’ganjig (Eel River Bar). According to Chief David Peter-Paul, the Indigenous Knowledge Study includes an examination of customs and oral history and will determine current and past land use, and will be completed in the coming months. The study won’t determine support or opposition for the project, but will inform that discussion.

“When we review a project, we want to ensure the project is sustainable and will not do damage to the environment or infringe on Aboriginal and Treaty rights,” he said in a statement. “We cannot provide support or refuse to consent to a project until all the technical documents have been reviewed, Mi’gmaq knowledge about the project area has been gathered and Mi’gmaq values applied in our decision making.”

Maritime Iron is only focused on the Belledune plant; it has no other operations.

According to McKenzie, who has been with the company for three years, Maritime Iron has put more than $20 million into the project and has enough funding to get through the Environmental Impact Assessment. More money will be raised if the project emerges successfully from that process, he said. The provincial government has given Maritime Iron $716,699 for pre-feasibility and feasibility studies, but McKenzie called that “a small amount.”

McKenzie says private investors from across Canada are backing the project, including pension funds, institutional investors, and high net worth individuals. But he’d only name one investor: the Atlantic Canada Regional Council of Carpenters, Millwrights and Allied Workers, which represents nearly 10,000 workers in Atlantic Canada. “They’ve invested cash,” he said. (Debbie Romero, the group’s executive secretary and treasurer, would not divulge its investment).

Asked about the challenge of raising the many millions still needed to fund the $1.5-billion project, McKenzie said major steel companies want the product Maritime Iron plans to sell. “So I don’t see it as a big challenge to raise that money,” he said. “We have bankers that are already engaged that are working on it.”

Although the project is behind schedule and still in its infancy, McKenzie says he’s sure it will actually come to fruition. “I’m 100 per cent confident that we’ll be able to get this done,” he said. “We’re very confident that we will be able to deliver.” •

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