Alderon CEO asks government to release reports on viability of Wabush Mines
Alderon Iron Ore Corp., one of the companies bidding on Wabush Mines, is adamant the mine is no longer economically viable, and its top executive believes the Newfoundland and Labrador government is also of that opinion.
"We know they're in possession of reports that confirm what we're saying," Alderon CEO Mark Morabito told CBC News.
"We'd like to just make them public so everybody can just move on [from] restarting something where it just doesn't make sense."
The company confirmed Wednesday that it has bid $1 million to acquire the mine which is tied up in creditor protection proceedings.
Alderon plans to use the pits at Wabush Mines as a tailings dump for its proposed Kami project, nearby in Labrador West.
"We do not need to have the Wabush pit ... in order to put our project into production but what it does do for us is improve the economics," Morabito said.
"We can't go ahead and raise money for the project until we know what the project dimensions are and that won't be confirmed until we have certainty on Wabush."
Morabito said the company has made an access to information request to get the reports but government refused.
"The release of these reports at this time would impact the government's ability to proceed in the best interests of the province, the current owners, the government and any future development," the government said in declining the request in early March.
"One of the reports is an update to a report which is public from 2006 ... It said [the reserves] would be exhausted several years ago," Morabito said.
Not an easy sell
There is iron ore left in the ground according to Morabito, but not a type that is easy to offload.
"There's simply no place to sell high-manganese iron ore," Morabito said. "If you want to fix that manganese issue then you have to put in a treatment process and that costs too much money ... three times what it is today to get a return on capital."
Morabito said the idea to restart the mine is favoured because "politically, that makes everyone happier."
Pension liability
Morabito said it would be prepared to assume the liabilities that come with the mine if its bid is successful but would not share responsibility for pensioners whose plan was left underfunded by more than $45 million when Cliffs Natural resources pulled the plug in 2014.
"Absolutely not," Morabito said.
"If you want to throw that burden on a new company that's trying to get a new project off the ground, there's no way that Alderon can take on those obligations. We don't have any revenue, so how could we?"
