A Minnesota mining company sounds serious about re-starting Labrador iron ore mine
IS TACORA RESOURCES INC. the savior the community of Wabush has been looking for ever since Cliffs Natural Resources closed its iron ore mine there in 2014 and put close to 500 people out of work?
The Minnesota-based company is looking that way as it continues to go through the Companies Creditors Agreement Act process of purchasing the Scully mine in Wabush. The mine has been under creditor protection since Cliffs closed it. “We feel very good about this,” says Tacora CEO Matt Lehtinen.
The sale of the mine was approved by the court in June and the deal closed in July. Since then, Tacora has been busy. It’s struck a collective bargaining agreement with the United Steelworkers union and signed a five-year agreement with U.S.-based Cargill to sell 100 per cent of its iron ore to Cargill through 2022. The next step is completing a feasibility study that will outline the mine’s reserves and economics. Lehtinen expects that to be done by the end of 2017. “Once the feasibility study is complete we have to raise the funds necessary to re-start mining,” he says.
Tacora hasn’t said how much it will take to re-start mining in Wabush. “We have a good idea what it is but can’t say at this point,” he says. But it is notable Lehtinen speaks in terms of ‘when’ not ‘if’ the mine will re-open. There are naysayers out there who don’t think Tacora will be able to operate the mine profitably. Vancouver-based Alderon Iron Ore Corp had a $1 million offer on the table to buy the mine and use it as a tailings site for its proposed Kami iron ore project located near Wabush. Alderon CEO Mark Morabito has said the mine is no longer economically viable.
Lehtinen disagrees. He says there are some key reasons why Tacora can be successful operating the Scully mine when Cliffs couldn’t. One factor is the company will only be producing iron ore concentrate, as opposed to processing it into pellets as was previously done. Another is that it has what Lehtinen calls a “sustainable” labour agreement with the United Steelworkers.
“This is a fresh start with a new organization,” he says. “Over the next six months Wabush residents can expect to see substantial activity in re-starting the mine.”