By Mark Cardwell
After years of strained relations between Cliffs Natural Resources and many of its fellow stakeholders in and around the Labrador Trough, including the Port of Sept-Îles, the American mining giant’s recent withdrawal from Eastern Canada is being seen as something of a new dawn for the iron ore industry in Quebec’s North Shore region.
One issue was resolved late last year, when Cliffs called off a court action aimed at getting an interlocutory injunction against the Port of Sept-Îles. Launched in July 2013, the action was intended to force the Port to grant Cliffs the consent it needed to upgrade wharf 30 at the Pointe-Noire terminal.
“Port of Sept-Îles is satisfied with the outcome of this case and considers it closed,” the facility said in a terse press release on December 16.
In the meantime, a committee was created to deal with the impacts of the planned closure of Cliffs’ Natural Resources, to negotiate with the company in regards to the sale of its assets, and to develop a strategy to help its local workforce. “The Port will seek to actively contribute to the Cliffs Emergency Committee as part of its statutory role as development agent supporting the regional community.”
The situation took a dramatic turn in January, when Cleveland-based Cliffs filed for creditor protection for its mining subsidiaries in Eastern Canada. In April, the company announced that its mine, railway and port assets in the region are up for sale. Interested parties were asked to submit non-binding letters of intent by May 19. If a deal can’t be reached, the assets, which include Cliffs’ Bloom Lake and Wabush mining companies, the Arnaud and Wabush Lake railway companies, and the company’s facilities in the Pointe-Noire sector of Sept-Îles, will likely be liquidated on the auction block.
In early May, Quebec’s Minister of Economic Development said the province is willing to buy crucial transportation infrastructure and even become a financial partner in the Bloom Lake mine if that’s what it takes to entice potential partners to invest in the moribund project. “We’re trying to ensure the survival of the mine,” Jacques Daoust told Bloomberg News in an interview in New York City. In addition to buying a rail line and Cliffs’ facilities, Daoust said his Liberal government would buy 20 per cent of the closed Bloom Lake mine. “If the last 20 per cent is a problem, I will fix it,” Daoust told Bloomberg.
For Gagnon, the legal procedures and the now resolved access dispute with Cliffs have not helped efforts to attract investors to the North Shore mining industry. However, he considers the arrival of new ownership in the Pointe-Noire area, together with an eventual rise in global iron ore prices, are reasons for optimism. “Our new multi-user wharf means we’re ready for the return of iron ore markets,” said Gagnon. The new wharf, he added, might even be expanded in a second phase, doubling its capacity, if the $12 billion dollar world-scale project at Otelnuk Lake goes ahead with its owner Wisco Canada Company Limited (60 per cent) and Adrianna Resources Inc.(40 per cent).