The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
MONTREAL — Hobbled by an iron ore price plunge and high costs, Cliffs Natural Resources Inc. says it is “pursuing exit options” for its Eastern Canadian iron ore operations which may result in the closure of the Bloom Lake mine.
The U.S. iron ore producer, cut to junk status by Standard & Poor’s last month, said on Wednesday that a “potential investment” in Bloom Lake is not “achievable within a time frame acceptable to Cliffs.”
Closing costs at the mine, located north of Sept-Îles, Que., would be in the range of $650-million (U.S.) to $700-million over the next 5 years, the company said. About 500 people work at Bloom Lake.
The price for iron ore – a key ingredient in steel-making – has slipped to its lowest level in more than five years. It is now in the $72-per-tonne range and could fall to less than $60 as output continues to rise and global demand remains weak, Citigroup Inc. said in a report.
A slump in Chinese demand and a global iron ore glut as Australian producers ramp up production have pushed prices down. “The drop in the iron ore price is forcing the closure of some of the higher-cost ore mines,” Raymond James analyst Adam Lowe said.
Earlier this month, Cliffs said it is closing its Wabush Mines operation in Newfoundland and Labrador.
Meanwhile, Labrador Iron Mines Holdings Ltd. decided this year not to resume seasonal mining operations at its property in the Schefferville region of Quebec.
Cleveland-based Cliffs said last month it was in talks with steel makers about selling a stake in Bloom Lake, with a share of the output as part of the deal.
Cliffs had been seeking outside funding to expand the operations, described by one analyst as the world’s most expensive iron ore mine.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/lacking-buyers-cliffs-natural-looks-to-exit-quebecs-bloom-lake-mine/article21646609/#dashboard/follows/