The Iron Ore Company of Canada is shutting down three of its six machines at its pellet plant in Labrador City as it struggles to accommodate slumping iron prices, according to the Steelworkers local.

"They're telling us it's based on production itself, on how much the price of ore is, and how much the price of pellets are," said Ron Thomas, president of United Steelworkers Local 5795 who met with IOC management Nov 5.

Thomas then sent a memo to union members alerting them to the change — the latest in a series of efforts by IOC to deal with the downturn in the iron industry.

No layoffs

"Our first concern would be more layoffs," said Thomas. "The company has told us at this time they're going to keep the people and disperse them across the project."

"So it is of some concern, but there is a little bit of hope for no more layoffs than we got right now."

IOC has not responded to several requests for information from the CBC. 

There are 44 employees at the pellet plant.

According to Thomas, IOC is also going to lay off some contractors on the project and give some of that work to union members, some of whom are currently laid off.

Automation on the horizon

Thomas also said IOC is considering automating some of its operations.

"They told us they're going to start getting with the times," said Thomas, who added the company is looking at automating such equipment as its pod crushers.

"This is not going to happen overnight."

"If we have to reduce our manpower because of technological change, there is a way in our collective agreement that we deal with it. We offer packages to senior people," said Thomas.

Thomas added there are still thousands of outstanding grievances between IOC and his union members.

He remains concerned about the fate of laid-off employees, as well as some work conditions at the pellet plant.