The Bloom Lake mine in northern Quebec will be back in business by March of next year, according to its new owners.
Quebec Iron Ore Inc., a subsidiary of Champion Iron Ltd. (TSX:CIA), said last week that its 250 workers on site will be joined by 450 more by Christmas, reported Duluth News Tribune, on Saturday.
Montreal-based Champion has so far raised $350 million to restart the mine including $51 million from the Quebec government and debt financing worth $180 million announced in July. The large loan follows the granting of a $40 million bridge financing back in May plus offtake agreement. Sojitz Corporation, which loaned $20 million, has agreed to buy up to 3 million tonnes a year from Quebec Iron Ore upon the mine restarting. The agreement is for an initial five years, to be renewed in five-year terms.
In 2016 Champion Iron Ore, an iron ore explorer with offices in Canada and Australia, bought the Bloom Lake operation along with its rail assets.
The mine’s former owner, Cliffs Natural Resources (NYSE:CLF), shuttered production in late 2014 as part of a greater plan to exit its money-losing Canadian operations. Cliffs, the biggest U.S. iron ore miner, purchased the mine for US$4.9 billion in 2011 at the top of the market for iron ore. However the company struggled to make a go of the operation and it sustained quarterly losses until Cliffs finally gave up on it turning a profit, as the price of iron ore tumbled.
The new Bloom Lake mine is expected to produce 7.4 million tonnes of iron ore concentrate, which the company says it has already sold in offtakes, according to the Duluth News Tribune. Champion signed an agreement with Glencore (LON:GLEN) back in August to buy ore from the mine for the next decade. The commodities trader and miner also agreed to invest over $56 million in the project.
Wabush Mines, another former Cliffs operation, is also slated to begin mining again, after Cliffs shut its gates in 2014. In June the United Steelworkers Union signed a five-year collective agreement with U.S. company Tacora Resources for the Scully Mine operation in Western Labrador.
Tacora reportedly has a process to separate the iron ore from magnesium, thereby keeping the mine running up to 25 more years.
Before the mine can re-open, however, it needs approval from the provincial government, since the facility is currently under the protection of creditors. Financing, purchase agreements and remediation details would also need to be worked out.