Premier Brian Gallant says an iron company plans to set up a $1 billion processing facility in Belledune, a project that he says would create 1,000 short-term jobs and more than 200 permanent jobs.

Gallant said at an announcement event outside NB Power's Belledune generating station that Maritime Iron plans to process 1.5 million tonnes of iron annually at the plant.

But the facility is not a done deal yet.

"There is still lots to do, such as more consultations with community leaders and First Nations people, as well as going through the appropriate environmental assessments," the premier said, "but today is a big step forward for this important economic development opportunity."

Government and company in partnership

Gallant said the government will be a partner with the company in exploring the feasibility of the project.

The facility would allow iron ore from Quebec and Labrador, now shipped to China, to be refined instead in Belledune.

Gallant said that would reduce shipping distances dramatically, from 17,000 nautical miles to just 227 nautical miles, producing fewer greenhouse gas emissions from the ships that carry the ore.

But Gallant was silent on what kind of emissions the plant itself would produce, and whether that volume would offset the shipping reduction and lead to a net increase in emissions.

Gallant's Liberal government has justified its refusal to impose a carbon tax higher than the existing provincial gas tax by pointing out the province is already below the federal emissions-reduction goal for 2030.

Environmental benefits

The premier claimed another environmental benefit of the facility would be a gas byproduct that could be burned to create electricity at the Belledune generating station.

Maritime Iron’s executive chairman Greg McKenzie, seated next to Premier Brian Gallant, said the company is looking forward to making the project a success for northern New Brunswick. (Serge Bouchard/Radio Canada)

Maritime Iron's executive chairman Greg McKenzie said that would allow Belledune to burn 60 per cent less coal, a fuel that it is required to phase out by 2030 under the federal climate plan, and continue operating after that deadline.

Assuming the feasibility study is positive, Gallant said construction would start next year, with production to begin in 2022.

Worldwide customers

"Maritime Iron looks forward to working on this project to make it a success for the North Shore and all New Brunswickers," McKenzie said.

The company will use a proprietary refining process called Finex that was created by Posco, a South Korean iron company. Gallant said the process will mean a smaller environmental footprint than conventional refining.

The finished product's expected customers are in North America, Europe and the Middle East.

Gallant's announcement came nine weeks before the start of the provincial election campaign in which he'll be seeking a second mandate.