The Labrador Trough And Canada's New Iron Rush

by: Tickerscores

China's increasing demand for steel is driving iron prices upwards and causing a new wave of iron exploration worldwide. Canada's Labrador Trough has been identified as a very promising region and in 2011 alone, $15 billion was invested in the Canadian iron ore sector. The provincial and federal governments are also taking steps to support development -- Quebec has announced an $80 billion investment plan to develop the region and the federal government is helping to expand the Port of Sept-Iles, the largest iron ore port in North America.

With surging iron ore demand and government support, the Labrador Trough is poised to become one of the world's major iron ore producing regions. Click on the infographic below for the full story!

(Click to enlarge)

Iron has been produced in the region since the mid-1950's, and currently some of the largest iron ore companies in world are operating in the Trough. The producing companies today are ArcelorMittal (NYSE:MT), Rio Tinto's IOC (NYSE:RIO), Cliffs Natural Resources (NYSE:CLF) and Labrador Iron Mines (OTC:LBRMF).

On top of the major producers, there are also a number of exciting junior companies in the Trough that we recommend looking into.

Oceanic Iron Ore Corp. (TSX.V - FEO) is planning a hugely ambitious project at its Ungava Bay iron deposits. Because of its properties' very close proximity to a year-round shipping port, Oceanic is hoping that the diminished land transportation costs will make up for the operational difficulties associated with shipping out of this region.

Adriana Resources's (OTC:ANARF) Lac Otelnuk property has the potential to not only be the largest operating mine in Canada but also one of the richest iron deposits in the world. Adriana has secured a joint venture with WISCO which gives the Chinese steel giant a 60% share of the project.

New Millenium Iron Corp (TSX - NML), like Adriana, also has a large taconite iron resource at its Labmag and Kémag properties, along with a joint venture agreement with major Indian steel producer Tata Steel for their DSO ("Direct Shipping Ore") project.

Alderon Iron Corp (ALDFF.PK) is currently developing its Kami Iron Ore Project near Labrador City. While the project might appear small when compared with the Lac Otelnuk and Labmag properties, the Kami project is in reality a world class iron resource within 20km of a hydro power station, roads, and a multi-user railway. Alderon recently announced a partnership with the Hebei Iron and Steel Group, China's largest steel producer. Alderon plans to start production in 2015.

Champion Minerals (OTCPK:CPMNF) have a number of promising properties in the southern end of the Labrador Trough - Fire Lake North, Bellechasse, Harvey-Tuttle, and the Moire Lake project, all of which have NI 43-101 compliant resource estimates. Champion Minerals now has more than 500 million tonnes of iron indicated and 2 billion tonnes of iron inferred in the Labrador Trough.

Zone Resources (TSX.V - ZNR) is another junior exploration company in the region. Its properties are in the preliminary stages of exploration with a market cap of approximately $3 million. That said, the highlights of Zone's 2011 drill program show respectable iron intercepts of 35.77% over 243m on the Girard Property, and 32.54% over 167.1m on the Moore-Ross property. As you can see from the infographic, these grades are very comparable to the other more advanced projects in the area.

The Labrador Trough is one of the last places on Earth with this many high-quality, undeveloped iron deposits. Surging demand from the developing world is leading many Asian steel giants to partner with junior exploration companies in order to secure supply. Investigating the Labrador Trough is a must for any commodity investor. Good luck with your research!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Visual Capitalist content is researched independently with the goal of educating investors on resource investing and management. Visual Capitalist does not receive direct compensation to produce this content, though it does provide other services and sponsorship opportunities from time-to-time to help cover costs.