Cleveland-based Cliffs Resources is exercising its right of first refusal to acquire outstanding shares in Wabush Mines from U.S. Steel and ArcelorMittel, according to CBC.
The buy-out comes in response to a bid by Consolidated Thompson for the shares.
-srbp-
China is starting out the New Year by limiting imports of iron ore. That is likely to further depress ore prices or ensure they stay low.
That isn’t good news for Labrador west, where one of its two mines has laid off half the workforce and the other postponed a major expansion indefinitely.
Meanwhile, if Rio Tinto competitor Billiton keeps pushing out ore and making a profit at the same time, Rio Tinto might find itself squeezed even harder if the Chinese start restricting market access.
-srbp-
Just when everything was settling down, the brute force expropriation of AbitibiBowater assets has stirred everything up again.
Lord Haw Haw of Brownenvelope is back on the airwaves praising his former employer to the hilt and taking issue with anyone who suggests that maybe the Premier might be acting a little rashly. Then at the end of the two hours of blindly praising his former employer, Lord Haw Haw proclaims that people shouldn't blindly praise leaders.
The man lampoons himself every day and seems blissfully unaware.
The airwaves of Lord Haw Haw's afternoon laugh-fest and the morning talk show were crammed with every manner of worshipper praising the expropriation. Then again, most of those were just the usual suspects spouting the usual pap.
Meanwhile, outside Newfoundland and Labrador, people wonder what the heck is going down in Hooterville.
Again.
Well, here are a couple of points to ponder:
1. No one should doubt what would have happened in 2006 if the provincial government had the legal power to expropriate offshore licenses. That's the time the Premier fumed about expropriation. Too many people laughed the whole episode off as a big bluff.
2. Since the provincial government can't expropriate the offshore, the oil industry is resting easy. Hibernia, White Rose and Terra Nova are salted away. The companies wrestled huge concessions from the government on Hebron. There's nothing for them to worry about.
3. Other companies on the other hand are probably not sitting quite so pretty. Kruger, Vale Inco, Wabush mines, IOCC. They all are likely checking their legal agreements with the provincial government. Some of them might even start discussions to secure whatever guarantees they can against precipitous actions by the provincial Crown. If the provincial government is prepared to use the extreme solution up front to strip the carcass of a dead project, no one would blame those companies for wondering what might happen to a troubled one.
4. IOCC and Wabush Mines might want to take another look at their power contract and the whole Twin Falls Company. The last time this issued was raised - in 2006 - the Premier raised the completely false idea of sweetheart power deals and resource giveaways to bludgeon to death any suggestion the companies could avoid paying commercial rates the next time the deal came up for renewal.
Here's an extract from the post on that issue back in early 2007:
In early October, the feisty Premier warned Iron Ore Company of Canada - owners of the other mine in Labrador West - that they could expect to pay commercial rates for electricity once the current agreement ended. Williams likened the IOC/Wabush Mines power purchase deal to the Hydro Quebec giveaway on the Upper Churchill presumably knowing full-well that his comparison and the truth were two completely different things.
Presumably the same thing applied to Wabush Mines. You can imagine the talk: Forget the low cost power, boys, sez Danny. No more give aways. Maximum benefits to the province or take a hike.
And since Williams had flatly rejected a power deal in public, there was no way he would back down.
-srbp-
1. Consilient Technology, a success story in the local information technology sector closed its doors today. The office is closed and the furniture is gone, according to CBC news.
In his report for 2006, issued early in 2008, Auditor General John Noseworthy raised concerns about the conditions attached to an infusion of provincial public money.
2. Wabush Mines is slashing production in response to the global economic downturn. Production forecast for 2009 is about half of what it was in 2007/2008. Layoffs are expected.
Other factors are influencing the Wabush Mines decision in addition to the demand drop:
"We are now going through the most difficult time in the history of Wabush Mines, with, from what I perceive to be, an unfavourable work climate at the plants, the worst cost structure in North America and a plant that is aged," he said.
-srbp-
Stelco Inc., which slapped a "For Sale" on its door last week, is selling its stake in the Wabush iron ore mine joint venture for an estimated $163.4-million as part of its efforts to "surface value" for shareholders.
As its annual meeting was getting under way Wednesday morning, the Hamilton, Ont., steel maker, announced it has struck a deal to sell its 44.6 per cent stake in the venture to Consolidated Thompson Mines Ltd. (CLM) of Toronto.
Les Mines Wabush, situées à Sept-Îles, est dans la mire de Québec Cartier pour qui elle a accepté dernièrement d’ouvrir ses livres afin que cette dernière puisse examiner d’un peu plus près la santé de l’entreprise minière.Essentially, Quebec Cartier is conducting a financial assessment of Wabush Mines with an eye to making an offer on the company.
Québec Cartier pourra donc faire une étude comptable de Mines Wabush mais n’a pas encore donné de date en ce qui a trait au dépôt d’une offre officielle d’achat. Des échanges ont toutefois eu lieu entre les deux entreprises et des experts de Québec Cartier sont venus visiter les infrastructures de la mine.
Québec Cartier appartient maintenant au groupe européen Arcelor Mittal et ce rapprochement avec Mines Wabush pourrait très bien s’inscrire dans le cadre de son plan minier qui s’étend jusqu’en 2026.
Une autre grande compagnie minière, Consolidated Tompson, s’était montrée intéressée par la mine de Sept-Îles à l’automne dernier. Elle a toutefois choisi de se concentrer sur un projet d’usine pilote de réduction du manganèse, d’une valeur de 1M$, qui assurerait la survie de la mine Scully de Mines Wabush au moins jusqu’en 2021.