MONTREAL — Champion Iron Ltd. is restarting production in March at its Bloom Lake iron mine in Quebec’s Labrador Trough, three years after it was shuttered when its previous owner sought creditor protection.
Some 450 workers will be on site around Christmas at the facility near Fermont, Que. About 250 of the total workforce has already been hired to get the mine ready for a resumption of activity.
A subsidiary of Champion Iron (TSX:CIA) is reopening the mine after raising $350 million in financing, including about $51 million from the Quebec government and a US$100-million loan from the Caisse de depot pension fund manager that is partially tied to the price of iron ore.
Sprott Resource Lending is also providing US$80 million in the form of a five-year senior secured loan.
“It’s never easy to raise $350 million to start a project but people believed in the potential of the iron mine at Bloom Lake,” chief operating officer David Cataford said in an interview from Fermont.
The mine is expected to produce 7.4 million tonnes of iron concentrate per year, all of which has been sold.
The Quebec Iron Ore Inc. subsidiary and agencies of the provincial government bought the Bloom Lake mine and a regional railway last year from an affiliate of Cliffs Natural Resources that was put into creditor protection after ore prices tumbled.
Energy and Natural Resources Minister Pierre Moreau said the government has supported the mine’s revitalization because of its strategic importance to the Quebec economy and Fermont community.
“This project is one of the initiatives that will make a significant contribution to the success of Plan Nord. It will promote the development of our natural resources responsibly while leveraging our skilled workforce,” he said in a news release.
Cataford said the company has the advantage of having access to the Sept-Iles port that can handle large ships to transport the ore and a railway to transport the product to port.
“We will benefit from this pier so logistically we have a big advantage.”
The reopening was announced as the Quebec government reported that mining investments in the province grew last year for the first time since 2012.
Quebec’s statistics institute said spending grew 2.9 per cent from the prior year to reach $2.57 billion. That’s almost half the $5.13 billion in activity five years ago.
Iron ore is the second most important metal after gold, accounting for 23.5 per cent of investments last year.
It forecasts the investments will increase 17.8 per cent this year to reach $3.02 billion.