Wabush Mines has received approval from the Quebec Superior Court to be sold to Tacora Resources Inc.
FTI Consulting Inc., the firm appointed to monitor the Companies Creditors Arrangement Act process the mine had been placed under when owner Cliffs Natural Resources declared bankruptcy, announced the decision on Monday.
Tacora gets the mine for $2.05 million in cash, and reportedly it must pay another $18.75 million in environmental and other costs.
In 2014 the mine was closed by Cliffs, putting close to 500 people out of work.
Since then, political and business leaders have been trying to find a buyer willing to re-open the mine.
Now it appears that might happen.
FTI Consulting says it expects the sale to close sometime on or before July 18.
In a press release announcing the court decision, Newfoundland and Labrador’s Department of Natural Resources says the purchase agreement approved by the court outlines the actions and responsibilities required of Tacora Resources “including the requirement of financial assurance for environmental rehabilitation.”
The same press release says Tacora plans to complete a feasibility study in 2017, and once that’s done, it will seek to raise additional capital needed to re-start Wabush Mines.
If it happens, that would certainly be good news for the town of Wabush. When an employer as large as Wabush Mines closes up shop, it has a devastating impact on the economy.
Tacora Resources isn’t a household name in the mining business. It’s a private company based in Grand Rapids, Minnesota.
Minnesota mining veteran Larry Lehtinen is behind the firm. He was also vice-president of Cliffs Natural Resources and knows the Labrador iron ore sector very well.
But finding the financing to re-open the mine won’t be easy. And there are some mining interests – Alderon Iron Ore Corp. in particular – that claim the mine is no longer economically viable.
Stay tuned on this one, folks. The story is far from over.