Wabush Mines purchase offer deemed a 'good fit'

Unionized workers and politicians are welcoming the tentative sale of an iron ore mine in western Labrador, in a deal observers say will significantly extend the life of Wabush Mines.

Toronto-based Consolidated Thompson announced a tentative deal on Wednesday to buy out a majority interest in Wabush Mines, one of two iron ore operations in western Labrador.

Earlier this year, Consolidated Thompson— which had been in exclusive talks with Wabush Mines since last year— walked away from a deal, but was evidently lured back to the table by the Newfoundland and Labrador government.

John Hickey, minister of Labrador affairs, said the deal will likely keep the mine site running for years to come.

"This is tremendous news for the employees of Wabush Mines, their families and the entire Labrador West region," Hickey told the legislature.

"It will provide more stability and security for those directly employed with the mining operation as well as for those indirectly dependent on this operation for their livelihood."

Consolidated Thompson controls the undeveloped Bloom Lake iron ore deposit in Quebec, over the border from Labrador.

Wabush Mines vice-president Jack Tuomi said the Bloom Lake development will be a good fit with the company's operations.

"Good things could happen with Consolidated Thompson's offer," Tuomi said.

"They're getting a lot of assets both here at Sept-Îles and also at Wabush, and it appears to have good synergies with their project at Bloom Lake."

Under the terms of the tentative deal, Consolidated Thompson would purchase the shares of Stelco and Cleveland-Cliffs Inc.

The deal hinges on minority shareholder Dofasco accepting the offer. Dofasco has 90 days in which it can consider a counter-officer.

Consolidated Thompson said it intends to upgrade milling facilities at Wabush Mines to accommodate higher grade ore mined elsewhere.

Jim Skinner, president of the local United Steelworkers local, saysthe Bloom Lake project could extend the life of Wabush Mines by as much as 20 years —and longer, should more deposits be found.

Yvonne Jones, a Liberal representing a southern Labrador district, said the announcement is good news for the entire Labrador region.

"It not only sustains the jobs that exist at Wabush Mines but it helps create more jobs in that particular area of our province and helps sustain the mining operation in that area into the long term, which is indeed a benefit for all of us," she said.