The Iron Ore Co. of Canada (IOC) wants to strike while iron is hot. The company, holding its quarterly meeting Wednesday and today for the first time in St. John’s, is studying the feasibility of more than doubling annual production at its Labrador City mine to 50 million tonnes of iron ore. The mine is already in the midst of an expansion to bump production from 22 million tonnes to 23.3 million tonnes, but company president and CEO Zoë Yujnovich said Wednesday they’re currently looking at an “exciting portfolio of opportunities,” which would be a turnaround from 2008, when the expansion currently underway was postponed due to the global financial crisis. Yujnovich said the economic picture for iron ore looks brighter today.
“I think underlying demand certainly looks very strong,” she said. “We’re very positive about the longer-term position. Additionally, I think both Rio Tinto and IOC has a much stronger position from a balance sheet perspective than it did at the very end of 2008 after a large acquisition we made with Alcan. So certainly we’re very optimistic that we have the capacity to ride through the storms and volatility which we will see in short-term markets.”
The study is part of what IOC is calling “Project Genesis” — the suite of expansions that will aim to double the company’s production, which Yujnovich said will be made possible by the company’s large mineral inventory.
“IOC is fortunate to have very large mineral inventory holdings, and it’s because of that that we can actually bring expansion plans such as the 50 million tonnes to fruition,” she said, adding that there is production for decades to come in Labrador City.
“When you look at the numbers that we have at IOC, it’s fair to say that we’ve been around for 50 years of operation and, unquestionably, with the mineral assets that we have and our expansion plans, we’re likely to continue in operation for the next decades, five decades or beyond,” she said. “I think we’re currently employing our fourth generation of employees, and it’s certain that we may well be up to the eighth generation of employees or beyond as our expansion projects continue.”
“I think underlying demand certainly looks very strong. We’re very positive about the longer-term position. - CEO Zoë Yujnovich
Yujnovich acknowledged ramping up production will also ramp up workforce availability and housing challenges in Labrador City.
“There’s a lot of things we’re doing. We’ve made announcements about actually building townhouses,” she said. “We’ll have some townhouses come on by the end of this year, and another set of townhouses come in the middle of next year. We’re also looking at affordable housing, and you may have heard of our Habitat for Humanity alliance that we have, which is really also tackling the variety of demographics that we have in Labrador City. We’re also looking at camp accommodations for our contracting workforces, for our construction, so I think it’s really a multi-tiered approach, of which accommodation is a core piece of what we need to address going forward.”
Alan Davies, president of international operations for Rio Tinto Iron Ore — the major shareholder and operator of IOC — said the company felt it was important to hold its quarterly meeting in St. John’s.
“We’re here because of the importance of the office we opened here in St. John’s and our interface with the Government of Labrador and Newfoundland,” he said. “Everyone’s really excited to be here. We have a big investment program, and normal board matters, so we’re very pleased to be here.”
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