IOC’s executive team made the decision to delay its internal process for approval to start the development of the Wabush 3 project to limit the amount of capital spent in 2016, according to an internal company memo sent out on Tuesday.
The board of directors supports IOC plans to continue with permitting and detailed engineering activities. The company will submit the revised approval request to the board in the second quarter of 2016, Thierry Martel, vice president of technical services, noted in the memo.
“The Wabush 3 project remains critical to the viability of the company for the future,” he wrote.
The provincial government gave the green light to the environmental assessment in September, giving company the go-ahead on the critical project that would provide sustainability over the amount of ore that goes to the plant to meet the rate of production.
While IOC started focusing on the project 2 1/2 years ago, discussions on the expansion began five to seven years ago. The Wabush 3 project is expected to extend the life of the mine by 12 years, from 2067 to 2079.
The additional pit would allow for greater ore flexibility due to its low strip ratio, and IOC could blend ores as needed for its clients, and have the available ore.
That would mean less waste to move, lowering costs, manpower, and time, and bringing more efficiencies to the company.
A spokesperson for the company told the Aurora in a September interview the total cost is expected to be around $75 million.
The low cost of iron ore has hit Labrador West hard in the past couple years, including the shut down of Wabush Mines which affected 500 employees, and layoffs at IOC.
Martel wrote that the project’s delay is necessary as the company faces challenges to remain competitive in the global market place.
“IOC remains at risk, therefore, we must continue to adapt to the challenging conditions every day. Our future depends on it.”