Mixed messages on iron ore

Ashley Fitzpatrick
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Labrador Iron Mines gets $30 million in partnership deal

Wabush Mines. — 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.

afitzpatrick@thetelegram.com

Organizations: Tata Steel

Geographic location: Quebec, Wabush, Pointe Noire

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Recent comments

  • Nick Kelly
    March 13, 2013 - 18:44

    With the way Quebec been acting there should be a pellet plant on the coast of Labrador . Give the coastal people jobs.

  • H JEFFORD
    March 13, 2013 - 07:48

    The Muskrat falls is a project that will insure a clean,safe,reliable and Dependable supply of power for the future, the cost of Gas And Fuel will increase each year as the supply decreases and the demand increases, Natural Gas Will also be Governed by supply and demand,But the Churchill River which ran from the for millions of years at no cost, will run for millions more, When the muskrat falls is developed the power supply of the falls will last forever, A Clean,Safe and Reliable source of Power.

  • Maurice E. Adams
    March 12, 2013 - 15:21

    While iron mines in Labrador reduce their exposure to world economic conditions and low lost iron from places like Australia, government is increasing its exposure to this volatile situation by wasting BILLIONS of the people's money for UNNEEDED Muskrat Falls power...... even the needs of the mines in Labrador are beconing increasingly suspect. PUT A HOLD ON MUSKRAT FALLS NOW.