Labrador Iron Mines gets $30 million in partnership deal
The future of Wabush Mines is in the hands of Dofasco/Mittal, the largest steel company in the world. File photo by The Aurora
It is not all doom and gloom in Canadian iron ore mining news today, despite the announcement of an idling of an iron ore pellet plant in Quebec.
The day after that announcement, a separate deal involving another Labrador-based mining operation has a multi-million-dollar cash injection for that company’s work.
On Monday, Cliffs Natural Resources announced it will idle its pellet plant in Pointe Noire, Quebec due to the current cost of the operation paired with pellet pricing.
The plant is fed with material from the Scully mine at Wabush, Labrador and the company will transition to iron ore concentrate only from the mine, by the end of the next quarter.
"Due to the dynamics in the marketplace, we are taking measures to adjust our iron ore pellet production at our Wabush operation while continuing to meet our customer commitments," said Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer.
The company said about 165 employees would be affected.
“The closure of the pellet plant in Quebec is an indicator that dynamics of the iron ore industry are changing, although it will not immediately affect the operation of the concentrator in Wabush,” Liberal MHA Yvonne Jones stated today.
“Wabush Mines continues to be one of the highest cost producers in the industry and any downturn in the markets will eventually impact the operation.”
Meanwhile, Labrador Iron Mines announced today it has reached a partnership deal with Tata Steel subsidiary Tata Steel Minerals Canada.
Under the agreement, the two will co-operate on getting their proposed direct shipping ore projects up and running.
This includes potential off-take agreements and a $30 million cash injection for Labrador Iron Mines.