Miner passes on Wabush for new mine in Quebec

A mining company has walked away from a plan to extend the life of a Labrador iron ore mine, and instead plans to develop a new mine across the border in Quebec.

Consolidated Thompson chief executive officer Brian Tobin— the former premier of Newfoundland and Labrador— unveiled the decision to community leaders Wednesday in a conference call.

Toronto-based Consolidated Thompson would not comment on why it decided not to follow through with an exclusivity agreement with Wabush Mines, but said in a news release that "potential liabilities" were a factor.

Tobin said residents of the twin mining towns of Labrador City and Wabush— each home to an iron ore mine— will benefit from an iron ore development at the Bloom Lake site, about 30 kilometres away.

"I think there's no question there'll be opportunities in the area for Wabush-Labrador City," Tobin said during the conference call.

"I don't want to speculate on what those are today— I think it's early to do that— but there's no question that if you have a substantial development like this in a border area between Quebec and Labrador, there'll be opportunities on both sides of the border."

Residents of Wabush thought an investment by Consolidated Thompson would have extended the life of the mine by several decades.

Tobin did not comment on how the mine site would be developed, or what type of housing would be pursued. The owners of the iron ore mines in Labrador City and Wabush, for instance, built towns around the neighbouring mines.

By contrast, Inco built camps for the nickel mill at Voisey's Bay, on Labrador's northern coast, and flies crews in and out.

Thompson Consolidated said in a release that production rates at the Bloom Lake site could reach seven million tonnes of concentrate a year. The company noted that prices for concentrate have increased almost 10 per cent recently, and that the outlook for ore prices is positive.