Canadian National Railway is postponing a feasibility study of a new 800-kilometre rail line from Sept-Iles to iron ore mines in the Labrador Trough.

The company made the decision after the Iron Ore Company of Canada announced last week it is slowing its expansion. As a cost-cutting measure, 300 contract workers were laid off from an IOC project in early February.

CN was working with several mining companies and a Quebec-based pension fund on the study into a rail line and terminal handling facility, which analysts estimated could cost $5 billion.

CN is expected to review the project again in June.