Iron in the Land of Cain

JOHN CLARE July 1 1947

Iron in the Land of Cain

JOHN CLARE July 1 1947

Iron in the Land of Cain


THE stunted trees cling to the grey rocks with clawlike roots that clutch at soil and life in the crevices. The earth’s crust is a rind of rock folded here by the mighty torsion of its PreCambrian birth, thrown up there in a flinty shambles where the ancient pressure burst the seams. Back in the days when this land was newer and the glaciers planed it down to size, the thousand and one lakes had their beginning.

This is Ungava. Jacques Cartier called it “the land God gave Cain.”

It lies north of the Gulf of St. Lawrence, north of the strip of civilization that rims the river, far north right up to Ungava Bay. Part of it belongs to Quebec—New Quebec they call it—and the rest of it is Labrador, the northeastern slice of this vast, last frontier which belongs to Newfoundland. And under the caribou moss that swathes the whole desolate uninhabited region there is iron ore.

No one knows just how much there is; they won’t know for some time. But the Hollinger mining interests, who have explored a small part of their big concessions (3,900 square miles in Quebec, 20,000 in Labrador), have found enough to start them planning a huge iron ore development.

Up to the end of last season about 30 million tons of ore had been outlined. Jules R. Timmins, head man of the enterprise, told a Senate committee recently the company expected to have a total of 100 million tons indicated by this season’s tests. When there are 300 million tons in sight the mining operation will start and it is possible the company will settle for less and tee off on the strength of 100 million.

Exploration has followed the height of land that casually marks the boundary between Labrador and Quebec. Work has been concentrated in the central part of the Ungava Peninsula about 300 miles north of the Gulf of St. Lawrence, and 700 miles northeast of Montreal. It has revealed high-grade iron ore deposits in a strip about 100 miles long and from 20 to 40 miles wide.

In the last five years the Hollinger people have poured a fortune into exploration costs in this remote area. Everything has to be flown in—in the early days it cost «$73 to lay down a hundredweight

In its vast Ungava empire, Hollinger, a great name in gold, is betting millions on becoming an even greater name in iron

of flour and $7 for a gallon of gasoline. Rates are now down to about 20 cents a pound, but even so transportation costs eat up a large chunk of the $1,400,000 the company has already spent and the $800,000 it. will spend this year.

But if this gamble pays off, about 2,«500 men will find jobs in the mines, and a settlement of 10,000 is likely to grow up in the wilderness.

So far it has been impossible to explore closely all the favorable ground, about 3,000 square miles on both sides of the border, and the work has centred in the area around the headwaters of the Koksoak River, which flows north in Canada to Ungava Bay, and the Hamilton River which tumbles through Labrador to the Atlantic.

Here, in an area about. 50 miles by five, are located most of the high-grade discoveries. Beyond this a*ea, as well as in it, large deposits of medium-grade ore (40 to 50% iron content) have been found. On none of these deposits has sufficient work been done to determine their full extent.

The place names come from an uncertain map known only to the explorers themselves—Burnt Creek, Knob Lake,

Ruth Lake, Sawyer and Wishart Lakes on the Labrador side and Burnt Creek again, Denault and Eclipse Lakes and Ferriman on the Quebec sides. The 1945 reports showed assays of 62.1%, iron on the Labrador side and 61.2%, in Quebec.

Some of the outcrops which have been explored are several thousand feet long and some hundreds of feet wide. This information indicates that, large open-pit operations may be used.

Because high-grade iron ore is becoming scarce, because the great fields of the United States, like the Mesabi range, are showing signs of exhaustion after the greedy years of war and because steel is still a strategic metal, steel men here and abroad are watching this new development closely.

It will take an estimated $100 millions, the construction of a 350-mile railroad through the wilderness and a possible 15 years before a ton of ore is shipped from the new field. But to steel men, who feel cramped unless they have 50 years reserves in sight, 1962 is the day after tomorrow. If the Hollinger project fulfills its promise it will play an important part in an industrial age that is still held together with iron and steel.

Three major markets await the product of the Labrador mines. They are Europe, the Atlantic seaboard and the Ohio and Pennsylvania steelmaking area, bordering Continued on page 51

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Iron in the Land of Cain

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on Lake Erie, which is now served by ore from the Mesabi and other mines of the Lake Superior district.

Prospective buyers in Belgium, Britain and other western European countries have made enquiries in recent months about a possible supply of highgrade ore from Labrador.

As soon as the Labrador mines are producing they will be able to sell to steel mills on the Atlantic seaboard— mills such as Dosco at Sydney, N.S., and the U. S. steel plant at Sparrow Point, Md. It has been estimated there is an immediate annual market in this area for 50,000 to 60,000 tons in Canada and 500,000 to one million tons in the U. S.

But the greatest potential market awaiting Labrador ore is in the Great

Lakes area, in the steelmaking capital of the U. S. and the world. This market could be served to a limited degree through the existing canal system, although the addition of another 20 boats a day to the traffic, the flow it is estimated would be required to carry the mines’ proposed delivery of 40,000 tons daily, would clog facilities.

If the Labrador project flourishes, considerable weight would be added to the argument for the construction of the St. Lawrence Waterway. Because the deep-water route to the upper lakes would then benefit Quebec, it is believed that the possibility has already removed most of the province’s objection to the seaway.

The price of ore will be a big factor in determining the success of the Hollinger venture. At the current price of about $5.25 a ton for standard iron ore (50% iron) observers believe the company would have a hard time to pay transportation and mining costs and still -amortize the big investment. However, there are indications that the price will rise. Steelmen think it will.

“With a favorable price, I can see the Labrador field shipping 10 million tons a year,” an iron ore expert estimated recently. That’s still a long way from the Mesabi scale—in normal years the Minnesota range ships 60 million tons a year. But at 10 million tons, the Labrador mine would be Canada’s biggest producer by far. Iron ore production in this country last year, mainly from two major Ontario mines, Steep Rock and New Helen, was 1,581,062 tons.

The Hollinger interests themselves refuse to comment on their chances. Other men in the trade temper their doubts with the knowledge that the Labrador field is being developed by the outfit that runs the biggest gold mining operation in Canada at the Hollinger Consolidated Gold Mine in Timmins. And backing up the financially powerful Hollinger group is the M. A. Hanna Co. of Cleveland, one of the Lake Superior area’s biggest iron ore mining companies, with years of iron ore know-how behind them.

Jules Timmins, who heads the parent and component companies in the venture, bears one of the great names in the history of Canadian mining. His uncle, Noah Timmins, developed the Larose silver mine at Cobalt and swung into gold mining to make another great success with Hollinger Consolidated, in production since 1912.

Timmins is not known to the public and shuns publicity. His name does not appear in Canada’s “Who’s Who.” He is 58 and has nine children and lives in Montreal, where he founded a brokerage firm which occupied most of his time during his early years. On the death of his father, and later his uncle, he took over the presidency of Hollinger. He still runs his brokerage firm.

If the Ungava enterprise matures, Hollinger interests would become the biggest group in the Canadian mining field and one of the giants of Canadian business.

They Wanted Gold

It may happen that the Labrador field will become one of the world’s great iron mines more or less by default. Most of the mining men who went into the country in the early days were looking not for iron but gold. Iron ore formations were found in the region as far back as 1893 by Dr. A. P. Low of the Federal Geological Survey. Low roughly outlined the shape of the geological trough, which has inspired the current development. There are indications that it begins in the north near Ungava Bay and swings south and east in a long crescent to the east coast.

In 1927 a Privy Council decision gave Newfoundland the coastal strip that is Labrador. In 1929 a group of Toronto financiers backed an exploration trip into the area. The party was headed by Dr. W. F. James and J. E. Gill and they made the first actual iron ore find in the Ruth Lake area near the present centre of the field.

The depression choked off any development of the find and it was not until 1933 that the attention of mining men was again directed to Labrador. Gold was found in the southwest comer of the territory but values were not high and professional and public interest swung back to the rich Quebec and Ontario north.

A company headed by A. H. Mackay, Montreal, obtained exploration rights to 20,000 square miles of Labrador in 1936 and went into the area looking for gold. There was little interest in iron ore at that time; as one member of that exploration group said recently, “In 1936 you couldn’t give it away.”

Dr. J. A. Retty, veteran geologist now chief of Hollinger’s exploration work, went into the territory first in 1936 and soon confirmed the earlier optimistic reports on iron ore deposits. Maps were inadequate and the party which flew in in the summer spent most of the first year mapping the country from the air.

Airstrip Planned

In 1937 an Indian trapper, Mathieu Andre of Seven Islands on the Gulf, brought Retty a piece of rock from Sawyer Lake. The Indian was no geologist, but he knew the white men were looking for rocks and to him this one looked pretty. To Geologist Retty it was beautiful, for it hinted at rich iron ore deposits at Sawyer Lake. Surface tests confirmed this and slowly the extent of the exploration spread out.

In 1939 an airplane attached to the exploration project was forced down in the bush and the crew of two starved to death.

During the war interest in exploration waned and in 1940 only two men went into the area. In 1942 the Hollinger interest officially came into the picture and took over the exploration concessions held by the Mackay group.

Since then exploration has gone ahead. The first diamond drill holes were sunk at Sawyer Lake in 1944. A permanent base camp was established near the centre of the field at Knob Lake and roads were built connecting the main deposits to the site of a landing strip on the Quebec side, which the Federal Government will be asked to help build this summer.

The exploration and preliminary work, and presumably the mining itself, will be handled through three companies controlled by Hollinger, with the Hanna Co. holding a minority interest, all subsidiary to Hollinger Consolidated. The three companies are the Labrador Mining and Exploration Co., the Hollinger North Shore Mining and Exploration Co. and the Quebec North Shore and Labrador Railway Co.

The Labrador Mining and Exploration Co. holds the concession on the Labrador side of the border. In return the company must give the Newfoundland Government five per cent on net profits from ore sold, pay taxes and * employ Newfoundland men whenever possible. The company’s concession runs for 90 years and, out of the 20,000 square miles of exploration limits, it must select no more than 1,000 square miles for mining operations.

On the Quebec side of the boundary the Hollingers operate through the Hollinger North Shore Mining and Exploration Co. This company has exploration rights to 3,900 square miles and must select 300 square miles and start mining it by 1958. The company objected to this clause in the new agreement, which was concluded with the Quebec Government last year, but the provincial authorities insisted upon it. This condition could mean the Quebec Government wanted to make sure the work was not going to be concentrated in Newfoundland while

the Quebec territory was treated as a reserve.

The agreement calls for an annual rental of $100,000 after the mining operation begins and a royalty of four to seven per cent on all ore mined. The exploration license runs to 1952, when it may be renewed for two more periods of five years each. The operating license is for 20 years, with the privilege of renewing it for two more periods of 20 years each.

High-Powered Railway

The company also agrees to give precedence to Quebec residents when hiring.

The third subsidiary is the railway company. It will build a 350-mile railroad from the base at Seven Islands, on the Gulf of St. Lawrence, up the valley of the Moisie River into Labrador and back again into Quebec. It has been estimated the road will cost about $50 millions.

Optimistic observers, with nothing to do with the company’s planning, believe construction of the railway may begin in 1949 and be completed three or four years later. It would be the biggest railway building program in Canada since the two major lines went into their big construction program in western Canada in the 20’s.

A bill granting a charter to the Quebec North Shore and Labrador Railway Co. (capital stock issue, $2 millions) was recently passed by the House of Commons, having been introduced and approved in the Senate. Newfoundland has been asked for permission to enter Labrador territory with the line.

The Canadian bill gives the company, in addition to a railway charter, the “power to transmit telegraph and telephone messages for the public and collect tolls.” The company may also run ships, build docks and go into the warehouse business. It may “construct pipe lines for the transmission of oil, natural gas, petroleum and other mineral products between the termini of the railway, and construct reservoirs, warehouses and such buildings, machinery, plant and equipment as may be necessary for storage . . . The company may acquire, own, maintain and operate aircraft and all facilities appurtenant thereto for the transport of passengers, mail, express and freight.”

The railway charter also gives the company “the power to generate,

acquire, use, transmit and distribute electric and other power or energy and may construct, acquire, operate and maintain lines for the conveyance of light, heat, power and electricity.”

Grand Falls, on the Hamilton River, is about 150 miles southeast of the centre of the deposit. This great cataract is higher than Niagara, and a potential source of hydroelectric power.

The company may eventually build the railway through to a new port on Ungava Bay, but the port of Seven Islands on the St. Lawrence will be the outlet for the first few years. The company hopes to keep it open 10 months of the year with the help of icebreakers.

Experts see no reason why the mine itself should not be run year round since iron mines take no winter holiday in Sweden where conditions are similar. Knob Lake is on the same latitude as Flin Flon. Last winter the temperature didn’t go below minus 38.

The wide powers granted to the Hollinger interests met some opposition when the railway charter was moving through the House of Commons. William Irvine, CCF member for Cariboo, predicted that “in years to come there will be ample reason for objecting to what is being done in this House.” He thought “the Federal Government should have set aside these resources for the good of Canada and seen to it that this ore was brought to Canadian industry for the service of the people of Canada.”

The Hollinger interests are sensitive to this kind of criticism. They seem acutely conscious of their socialist critics, and yet they have clung to a policy of withholding all but the sparsest official information regarding their venture.

However, a spokesman for the company told me in Montreal recently: “The CCF talks about private industry getting these concessions, and yet how else would such a territory be developed? Would the Government spend the kind of money we have spent to investigate this area? Men have risked their lives, men have lost their lives opening up this development. We are undertaking an immense risk and if we are successful Canadian industry as a whole will benefit.” As the Hollinger’s cautious plans slowly mature, steel-hungry industry in Canada and the U. S. waits to find out how much and how soon. ★