Ring of Fire player Cliffs Natural Resources is postponing mine expansion and production at its core iron ore operations in Quebec and the U.S. iron mines.
Cliffs announced Nov. 19 of its decision to delay portions of the second phase of its pit expansion at its Bloom Lake Mine in the Labrador Trough. In addition, two of its iron ore mines northern Michigan and Minnesota are being idled.
The Ohio-based iron and coal miner blames volatile iron ore prices and lower North American steelmaking rates for the cost-cutting move.
"Despite today's announcement, we are still committed to our investments in Canada and believe Bloom Lake will deliver significant long-term value over time," said Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer.
No mention was made in the announcement of its Black Thor chromite project in the James Bay lowlands, now undergoing an environmental assessment. Cliffs is targeting a late-2016 startup for the $3.3-billion open pit and ferrochrome smelter in Sudbury. But that could be delayed until 2017 pending the outcome of a feasibility study expected next summer.
At Bloom Lake Mine, Cliffs is suspending construction of the expansion, including the concentrator and load out facility.
"As a result, construction related to these activities will cease and third-party contractors will be demobilized effective immediately," said the company in a statement.
Cliffs is continuing environmental work to complete Bloom Lake's water and tailings management system and ore storage facility.
While waiting on market conditions to improve, Cliffs still expects to complete the expansion in early 2014.
The delay of Bloom Lake Phase II decreases iron ore 2013 sales volumes to 9 - 10 million tons from the previous expectation of 13 - 14 million tons.
In the U.S., Cliffs will idle two of the four production lines beginning at Northshore Mining in Minnesota in early January.
Cliffs will also idle production at its Empire Mine near Marquette, Michigan in the second quarter of 2013. The move will impact approximately 125 employees at Northshore and 500 employees at Empire mine, respectively.
"Unfortunately the U.S. iron ore production curtailments will affect many of our employees," said Laurie Brlas, president of global operations.
"However, at this time, we believe it is prudent and necessary to match our production volumes with market demand."