IOC expansion back in motion

Shareholders have waved the green flag approving a $435 million expansion for the Iron Ore Company of Canada (IOC).

The investment is aimed at increasing the annual concentrate capacity by four million tonnes, a total of 22 million tonnes in two years' time.

The investment marks the first stage of a three-stage program that will potentially bring the annual capacity as high as 26 million tonnes.

The huge expansion program was initially approved in the spring of 2008 and suspended in the fall of the same year in response to the global financial crisis, which pounded markets worldwide.

IOC's president and CEO ZoË Yugnovich said this approval underscores the shareholders' confidence in the world economy and in the IOC's assets quality and potential.

"Some uncertainty and potential volatility remain about global economic recovery but we are seeing a strong rebound in the iron ore and steel markets with every expectation that it will be sustainable," she stated in a press release sent out last Thursday. "The fundamentals of our business are quite strong, and this expansion program will enable us to take full advantage of our market strength, and of recovering markets in Europe and North America."

The first-stage expansion will include: an overland conveyor to removed bottlenecks in the current ore delivery system; a fourth autogenous grinding mill which will increase primary grinding capacity, and additional (associated) mine and rail equipment.

The revised total of the project for the first-stage expansion is $539 million (Canadian dollars) which includes investments made before the program was put on suspension.

Steelworkers pleased

The announcement is great news for Steelworkers, said George Kean, who predicts strong growth in his bargaining unit.

"As a result of this, we will have new members for sure," said the USW Local 5795 president. "It's something very positive, not only for the Steelworkers but for the community as a whole.

There are many plus signs in this announcement, according to the union president.

"It's positive for the long-term viability of IOC," he added. "And this investment means good things as well for the province. We will see approximately 400 contractors come into Labrador West in the next couple of weeks, so it's win-win for everybody."

Kean said he is proud of the work his membership continues to do on the IOC project and said the decision of the shareholders last week is a vote of confidence for his bargaining unit.

"It shows that our membership is doing an excellent job and that the shareholders have faith in their work and the excellent product we are producing," said Kean. "So, yes, it's a vote of confidence for sure.

Mayor addressing housing issues

Labrador City mayor Janice Barnes echoed the union leader's enthusiasm over IOC's announcement.

"Council is extremely pleased with the $435 million expansion," she said. "It speaks to a renewed confidence in the iron ore industry and it shows that IOC has indeed rebounded."

The mayor said she recognizes the potential spin-offs for the local economy; specifically the increase in jobs this major investment will create.

She admits housing shortage issues will intensify but assures the Town is working diligently towards resolutions.

"We are working with developers around this issue," said Barnes. "We will also be collaborating with IOC, union, provincial government and local stakeholder groups around housing-affordable housing in particular."