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The Kami (Kamistiatusset) project property lies on the Quebec-Labrador provincial border.

Alderon Iron Ore Corp (TSE:ADV) jumped 7% to $1.35 after receiving final go-ahead for its Kami project from from the province of Newfoundland and Labrador.

Tayfun Eldem, Alderon President and CEO said finalizing the benefits agreement and receiving surface and mining leases mean "all the conditions of release from both the Federal and Provincial environmental assessment processes. Once the financing plan is complete, we will be ready to commence construction."

The Kami project is located near Wabush and Labrador City and Alderon is hoping to start construction later this year with first production around 2016. At full capacity the mine could produce 8 million tonnes per year with an estimated mine life of 30 years.

The Kami project is 75% owned by Alderon and 25% by Hebei Iron & Steel Group Co and mine construction will cost roughly $1 billion.

"In addition to approximately $3.9 billion in tax revenues, this mine will add an impressive $25.4 billion to the Province’s GDP. With a total direct investment of $11.9 billion, the Kami Project will also create approximately 800 construction and 500 full-time production jobs," according to Alderon's statement.

Last month the Newfoundland government will proceed with the construction of a third transmission line from Churchill Falls to Labrador West to deliver power to the company's Kami project.

Kami is surrounded by four producing mines – responsible for almost all of Canada's output of the steelmaking raw material – and will utilize a new $110 million export facility under construction at the deep-sea port of Sept-Îles in eastern Quebec.

The Kami Project currently contains an NI 43-101 Mineral Resource estimate of 1.1 billion tonnes Measured and Indicated at 29.6% iron and an additional 447.8 million tonnes Inferred at 29.5% iron.

This year iron ore is down 25% with benchmark Chinese import prices last trading at $98 a tonne, levels last seen in September 2012.