Bloom Lake sale 'bodes well' for Wabush Mines, MHA Graham Letto says
MHA Graham Letto says he's optimistic about the future of Labrador West, and Wabush Mines, now that the Quebec Superior Court has approved the sale of Bloom Lake.
"I think it's very positive and it bodes well for any future sale of the Wabush Mines itself," Letto told CBC Radio's Labrador Morning.
The shuttered iron ore mine in northeastern Quebec was bought by Quebec Iron Ore Inc., a subsidiary of Champion Iron Ltd., for $10.5 million.
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"The fact that the courts and the [Companies' Creditors Arrangement Act] has approved the sale for $10.5 million — which is very, very surprising given that this asset was purchased only a few years ago for $4.9 billion — I think it bodes well for any future prospects for Wabush Mines."
The Bloom Lake purchase agreement includes the mine and railway, as well as mineral claims owned by the Quinto Mining Corp. The deal is expected to be finalized before the end of March.
Letto said there's still a lot of work to be done before the mine is operational.
In the past, he said, the Labrador West service sector was a major contributor to Bloom Lake. But until the mine is up and running, Letto said it's impossible to know how much of an impact there will be.
Potential Wabush Mines purchase
Bloom Lake and Wabush Mines are both owned by Cliffs Natural Resources Inc., but Letto said they're "two completely different assets."
One company, which Letto wouldn't name, has shown a strong interest. He said the company has already made an undisclosed offer.
"The company that's interested is interested in operating the mine. When they plan to do that, I guess, will depend on the price of iron ore and the markets that they're able to achieve in the process," he said.
"That question has certainly not been answered yet."
Like Bloom Lake, any sale will first have to be approved by the courts.
Letto said the people of Labrador West want to see Wabush Mines up and running as people are anxious to return to work.
"They're receiving some three year relief from the government that runs out in 2018 so, yeah, we need that facility back up and running for the town to prosper and be viable again."