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The study will help determine the optimum features for the infrastructure and is part of the government’s budget, which aims to support the mining industry.
Champion said the work would be used to evaluate transport needs between the Labrador Trough and the port of Sept-Iles.
It will consider the concerns of all potential users and ensure a multi-user system favouring joint investment.
“It will stimulate further investment into the region and help establish Quebec as a region of international significance for the mining industry,” Champion chairman Michael O’Keeffe said.
“At a time of uncertainty in investment markets regarding the outlook for iron ore, this decision will be seen as a defining point in the history of the mining industry in Quebec.
“The government should be congratulated on its commitment to promote an initiative conducive to increased employment and new investment.”
Champion CEO Thomas Larson said the study would help miners in the region better serve global markets.
“This multi-user rail initiative, combined with the financial and operational expertise that Champion has after its recent merger, provides the company with a potentially clearer path towards the eventual delivery of product to the port of Sept-Iles in a competitive and cost efficient manner,” he said.
The Labrador Trough is a globally significant iron ore region, with annual production of around 50 million tonnes.
Global majors including Arcelor Mittal and Rio Tinto have assets in the area and a number of large multinationals are also involved in joint ventures in the wider region.
Champion holds a 100% interest in the Fermont Iron Holdings in Canada, including its flagship Consolidated Fire Lake North project, which hosts more than 3.4 billion tonnes of iron ore resources.
A prefeasibility study was completed on the project in February 2013 and work is in progress on a full feasibility study.
Champion Iron Mines merged with Mamba Minerals at the end of March, creating the new entity Champion Iron.
Champion shares were last trading 13% higher at A42c.
