After decades of lucrative development, Labrador iron ore continues to boom

Posted on September 01, 2021 | By Elizabeth Whitten | 0 Comments

Gloved hands holding Iron Ore pellets

After decades of lucrative development, Labrador iron ore continues to boom

It took Australian-headquartered Champion Iron Ltd. four attempts to buy Alderon Iron Ore Corporation’s high-grade iron ore mine known as the Kami project, located near Wabush, Labrador; but on April 1 the change in ownership became official. Champion got its new asset for $15 million, as well as the extinguishment of approximately $19.4 million of Alderon’s secured debt.

It couldn’t have come at a better time. In the last year, iron ore prices have doubled to more than US$200 a tonne and look to stay high for the foreseeable future.

“Now that it’s ours, we’re going to put our own colours on the project and see where we’ll go from there. How it gets developed, how quickly it gets developed; these are all questions we look to answer once we understand a little bit more what we have at stake. One thing is for sure, the resource is very high quality,” said vice president investor relations Michael Marcotte.

Iron ore, a key material in creating steel, is seeing record high prices due to decreased supply and increased demand.

In January 2019, Brazil-based mining giant Vale’s Brumadinho dam collapsed, killing 270 people. The tragedy also drove up iron ore prices around the world as Vale struggles with lower-than-expected output.

China, the world’s largest steel producer, has been gobbling up iron ore for construction of infrastructure like bridges, roads and buildings, largely sourcing its iron from places like Australia and Brazil. Last year, it imported an estimated 1.17 billion tonnes of iron ore.

Meanwhile, the worldwide post-pandemic construction surge and its associated steel consumption is adding additional pressure to global iron pricing.

 

Mining, haul trucks

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