Issue link: http://resourceworld.uberflip.com/i/423464
D E C E M B E R / J A N U A R Y 2 0 1 5 www.resourceworld.com 39 either eastbound trains headed for the port of Thunder Bay, or westbound lines, which connect with the extensive CN rail network that reaches as far as the west coast. The advantages of these potential shipping routes become clear when look- ing at the markets for Northern Iron's planned production. Having ready access to port would give Griffith the lowest freight rate to China of any Canadian iron ore play. This obviously represents a major advantage in selling into the world's largest iron ore import market. But it's not just international mar- kets that Northern Iron is targeting. The Thunder Bay port is also capable of easily reaching steel mills in the US Great Lakes region, where 60% of American steel man- ufacturing capacity resides. Should the current pick-up in US eco- nomic activity continue to gain strength, this latter and close-to-home market could prove a very profitable sale point for Griffith's iron. But it's not a necessity; if American demand comes in weak, the project can simply ship its supply further afield to growing international markets. Establishing those markets is exactly where Northern Iron's recent agreement with Danieli comes in. With the company looking to tap the Italian major's hold on the steel-making sector as a major advan- tage in forging offtake agreements. One of Danieli's strengths is in provid- ing custom plants for producing a product called hot briquetted iron, or HBI – a high- value metallic raw material, currently selling for $360 per tonne. The major is now looking at the installation of such a system at Griffith, which would give Northern Iron access to cutting-edge met- allurgical technology. Perhaps the bigger advantage is Danieli's extensive network of global contacts amongst end users of HBI supply. As part of the agreement, the firm has agreed to partner with Northern Iron in marketing Griffith's production and helping to secure financing and additional strategic partners for project construction, as needed. Northern Iron is already getting a lot of interest on that front with the Griffith Project having attracted a recent financ- ing deal from Hong Kong-based OMC Investments. In October, OMC agreed to finance an initial $952,000 into Northern Iron, with knock-on agreements that call for an additional $30.2 million in invest- ment to advance Griffith to full feasibility. The ultimate takeaway comes down to a big lesson that, in today's mining envi- ronment, it may no longer be size that's attracting the world's largest companies, but rather ease of development. Encouragingly, the Griffith Project also shows that the global appetite for projects fitting these specs is still running strong. Good news for those developers sitting on the right depos- its, with the right infrastructure. n