CN suspends feasibility study of proposed rail line in Quebec/Labrador iron ore range
MONTREAL, Feb. 12, 2013 /PRNewswire/ - CN (TSX: CNR) (NYSE: CNI) announced today that it is suspending the feasibility study for the construction of its proposed rail line and terminal handling facility to serve the Quebec/Labrador iron ore range.
The feasibility study was initiated last August by CN and its partner La Caisse de dépôt et placement du Québec (the "Caisse"), along with a group of six mining companies. The study has been progressing steadily over the past several months. However, the current market realities have resulted in anticipated delays with mine development projects in and around the Labrador Trough. A joint review of the project together with the mining companies indicates that mine construction schedules and diverging needs for each specific individual project will make it difficult to obtain the critical volumes of iron ore necessary to support the building of new rail and terminal infrastructure by CN.
The decision by some miners in the region not to join the group of mining companies supporting the CN infrastructure project is also a factor in the much-lower-than-projected iron ore volumes that are now expected to be shipped in the foreseeable future.
Luc Jobin, executive vice-president and chief financial officer of CN, said: "We have invested considerable effort and resources towards the feasibility study, but in light of the circumstances, CN has concluded that it is not advisable to continue with the feasibility study at this time."
Michael Sabia, President and Chief Executive Officer of the Caisse, added that "we understand that conditions in the global economy prevent undertaking the project at this time. As a long term investor, the Caisse remains open to participating in infrastructure projects that will facilitate the development of Northern Québec, always in partnership with an experienced partner that can minimize the operational risks. The Caisse is convinced that the long-term structural trends in the global economy will be favorable to the development of Québec's natural resources sector."
CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca.
Certain information included in this news release constitutes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements. Important factors that could affect the above forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks and assumptions detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CN's annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.
CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.
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