A buyer has finally emerged for the troubled Bloom Lake iron ore mine in Quebec, which was shuttered nearly a year ago after incurring massive losses.
Junior miner Champion Iron Ltd. has won an auction to buy the mine out of bankruptcy protection for $10.5 million. Champion, which has offices in Canada and Australia, will also assume $42.8 million of liabilities as part of the agreement.
“Bloom Lake is considered an exceptional opportunity for Champion, and one that would not have presented itself without the challenges of the current downturn in bulk commodities,” executive chairman Michael O’Keeffe said in a statement.
Indeed, the price tag is considerably lower than what Bloom Lake fetched the last time it was sold.
In 2011, U.S. miner Cliffs Natural Resources Inc. acquired the mine for a staggering $4.9 billion in cash. That deal was done at the absolute top of the iron ore market, and turned out to be a disaster for the buyer.
Bloom Lake simply never worked the way Cliffs expected. The company faced major operating challenges and incurred losses quarter after quarter until it finally halted production at the end of 2014.
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