Owner awards contract for iron project

International engineering and project manager AMEC plc said it has won a C$150 million contract from Baffinland Iron Mines Corp. for the C$4.1 billion Mary River Iron Ore Project on Baffin Island, Nunavut Territory.

The contract, through which AMEC will provide engineering services, logistics planning, procurement support and construction management services for both the mine facility and export infrastructure, is scheduled to run until 2014, when the proposed Mary River mine is targeted for startup.

The high-grade Mary River property is expected to produce around 18 million metric tons of iron ore per year for at least 20 years. No processing is required other than simple crushing and screening. The massive deposit is said to contain some of the highest grade iron ore in the world.

"The appointment of AMEC as our engineering, procurement and construction management firm marks a significant milestone in advancing the Mary River project into commercial operations," Baffinland Chief Operating Officer Rod Cooper said in a statement. "AMEC brings significant expertise in large-scale Arctic mining projects, and we look forward to working with them in the development of this world-class asset."

Neil Bruce, chief operating officer of AMEC's natural resources division, said the award of the Mary River project demonstrates AMEC's core expertise of delivering in challenging environments and provides an opportunity for the consultant to work with Baffinland on the project.

AMEC plc is a $4.6 billion company that provides consulting, engineering and project management services to energy, power and process industries in more than 30 countries around the world.

Bulk sample to confirm ore quality

Baffinland, meanwhile, is moving ahead with development of the Mary River Project. In addition to hiring AMEC, the company is working to complete a definitive feasibility study for an 18 million-metric-ton-per-year mining operation and complete a scoping study for the possibility of expanding it to 30 Mt/yr, company managers told shareholders at the annual meeting June 10.

Baffinland is beginning the formal permitting process for the project this year with a development proposal and associated applications leading to submission of an environmental impact statement, and concluding its minority strategic partnering initiative.

The company is employing 275 people this summer to prepare a 250,000-metric-ton bulk sample of lump and fine iron ore for delivery to five European steel mills for production trials this fall in preparation for negotiating long-term sales contracts in early 2009.

The tests are expected to confirm the high quality of Mary River lump iron ore. The bulk sample is scheduled for shipment August through October.