Baffinland Iron Mines Corp.’s president and CEO Brian Penney says there’s a possibility the company might mothball its Mary River iron mine next year.
Penney explained in an April 30 letter that shareholders are saying they won’t invest any more money because there have been delays securing the approval to expand the operation in northern Baffin Island.
“The letter was sent to all employees and contracting staff,” said Heather Smiles, Baffinland’s manager of stakeholder relations. “This letter is intended from an internal perspective to communicate to our employees on what to expect.”
Penney also cited forecast reductions in iron ore prices in future years as a contributing factor, and said cash generated by the mine for the remainder of this year will be used to pay down debt and shield the company from the expected downturn in the iron ore market.
“If the iron ore price falls below US$100 per tonne, Baffinland will evaluate its options, which include making preparations for placing the operation on care and maintenance in 2022,” he stated.
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