Alderon says China corruption probe won’t affect mine

The company planning to develop an iron ore mine in western Labrador says a corruption investigation involving its China-based minority shareholder will not affect its plans.
Alderon Iron Ore Corp. announced Tuesday it has signed a power-purchase agreement with the Government of Newfoundland and Labrador. (CBC )

Alderon Iron Ore Corp., the company planning to develop a new mine in western Labrador, says a corruption investigation involving the Chinese company that holds a minority stake will not affect its plans.

Hebei Iron and Steel Group, which acquired a 25 per cent stake in Alderon's Kami mine project in 2012, has been under a cloud with the removal of chairman Wang Yifang.

Wang has been accused of being linked to "stolen mine assets," according to a report earlier this month in the People's Daily, the Beijing-based newspaper of the governing Communist Party of Canada.

A new chairman has since been put in place at Hebei, the largest steel producer in China.

Alderon President Tayfun Eldem says the new chairman has assured Canada's ambassador to China that the company is still committed to developing the $1-billion Kami project.

"In a letter that he sent to [Guy Saint-Jacques], he re-iterated his 100 per cent commitment to Alderon and the project indicating that Kami is integral to their long-term strategy," Eldem told CBC News.

Alderon said last week it is waiting on the Newfoundland and Labrador government to decide whether it will defray the cost of constructing a dedicated power line that would run from Churchill Falls to the planned Kami mine site.