Chance of new life as American buyer eyes Wabush Mines

A United States company is looking to buy Wabush Mines with a view to having it re-opened within a year.

Virginia-based ERP Compliant Fuels has submitted a bid to Cliffs Natural Resources which owns the mine but closed it in 2014.

"We are very interested and trying to close the transaction this spring," said ERP co-founder Tom Clarke.

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Clarke said his company hopes to take full advantage of what the mine has to offer.

"The mine can produce up to six million metric tonnes, and employment would probably be somewhere between 300 and 400 people once we get back to the six million tonne production level."

Clarke said the purchasing agreement has to be approved by the courts, but he wants to get things going as quickly as possible.

"We're hopeful we might be able to close the transaction in the month of May. We're very aggressively trying to pull everything together," he said.

"We've been developing mine plans. We've done a lot of partnering, and had discussions with all the major parties that we would have to work with to restart the mine." 

Partnering with union

Clarke said it would be 2017 before ore could be shipped out.

"There's at least nine-to-12 months of work that has to be done before Wabush is actually able to produce concentrate again, and ship concentrate."

He said ERP is a very labour oriented company, and for this project has partnered with the United Steelworkers.

"We certainly view our relationship with the trade unions and labour as a very critical part of our success, and we view them as key stakeholders and partners."

We're hopeful we might be able to close the transaction in the month of May.- Tom Clarke

Clarke said iron ore is a commodity, which tends to go in cycles, and there's a bit of an upswing now.

"Not having debt, and really being a mining-focused, cost-focused organization, we are going to do just fine. And by integrating that with our coal sales at Stelco, we hope to make Stelco a very competitive player in the steel market."

ERP Compliant Fuels has a bid in to buy what was formerly Stelco, now known as U.S. Steel Canada, in Hamilton, Ontario.

Clarke said that bid, and the Wabush mine bid stand on their own. He said if the purchase of U.S. Steel Canada doesn't happen, ERP would still be able to ship iron ore from Wabush to partners in Europe, particularly Italy.