Wabush 3 mine a 'critical piece' of IOC's future, says president
Project clears N.L. environmental assessment process; mining to commence in 2018
The Labrador West mining industry received some long-awaited good news Friday, with the provincial government announcing that the proposed Wabush 3 open pit mine project has been released from the environmental assessment process, clearing the way for the start of construction.
Mine development is expected to begin in 2016, according to a statement from the Iron Ore Company of Canada, and mining could commence in 2018.
The pit is expected to extend the life of the existing operation by about a dozen years, now forecasted until 2079.
Development costs are estimated at $250 million.
While the project is estimated to generate over 2,400 person months of employment during construction, there will not be additional operations jobs, the statement added.
"This is about sustainability, not growth," the IOC statement noted. "During construction there will be a small temporary workforce for the development phase."
New pit will help maximize production, extend mine life
The existing mine and processing operation in Labrador City employs roughly 2,000 people, and produces about 21 million tonnes of ore annually.
But there have been questions about its viability in recent months as the industry endures a prolonged downturn, with one IOC executive telling CBC News recently the operation is "at risk."
The company has initiated a comprehensive plan to trim costs and improve productivity. The plan has included some layoffs.
According to the company's registration document, the new open pit mine is designed to extend the life of the so-called Carol Project, which has been in operation since the 1960s, and to overcome some recent challenges with maintaining enough mine production to realize the full potential of the ore concentrator, which is 23 million tonnes.
IOC president and CEO Kelly Sanders was not available for an interview Friday, but was quoted in a news release issued by the provincial Department of Natural Resources.
"The receipt of all required environmental permits for the Wabush 3 Open Pit Mine Project is a milestone in IOC's history and the provincial government and our community stakeholders have been partners in our continued journey to increase sustainability," he stated.
"Wabush 3 is a critical piece of IOC's plan for the future, extending our mine life and providing ongoing employment within Labrador West — some very good news in what continues to be a challenging time for the region of Labrador West."
The project will consist of an open pit containing 744 million tonnes of iron ore, an overburden storage area, a waste rock disposal pile, haulage roads, a pole line, a groundwater extraction system and a mine water collection, treatment and disposal system.
Future expansion not ruled out
Natural Resources Minister Derrick Dalley said the project is a great opportunity for Labrador West, a mining-dependent region that has experienced its share of highs and lows.
"We are optimistic that in the long term the combination of high quality iron ore resources, stable and dependable regulation and taxation, and low-cost power will continue to sustain the iron ore industry and communities in Labrador," Dalley stated.
IOC is the largest producer of iron ore in Canada, and currently operates five open pit mines, a concentrator plant and a pellet plant in Labrador West.
IOC transports its products along a 418-kilometre railway to its port facilities in Sept-Îles, Que.
In its registration document to the province, IOC hinted at future expansions, as well.
"IOC's Labrador West properties also contain significant quantities of additional iron ore resources and potential resources for future development," the document noted.