(CBC)

The Iron Ore Company of Canada said Wednesday an ambitious expansion program it unveiled earlier this year for its Labrador City mine is now on ice.

IOC, which is controlled by global mining giant Rio Tinto, said the $800-million expansion will not proceed until the global economic crisis clears.

Only two weeks ago, IOC said it was reviewing plans to expand its iron ore mine in western Labrador and shipping port in Sept-Îles, Que.

However, IOC now says it will not invest any more money in the project until the demand for steel improves.

"All expansion programs are now suspended," communications official Michel Filion told CBC News.

Asked when the expansion project may restart, Filion said, "You tell me when the financial crisis is over."

Rio Tinto said Wednesday it will eliminate 14,000 jobs around the world. Rio Tinto bought Canadian manufacturer Alcan last year in a $38.1-billion US deal.

The company has effectively halted new construction at the mine site, stopping a plan that was expected to increase IOC's production dramatically over the next three years.

Meanwhile, there are indications that there will be a deeper economic pinch in Labrador City next summer.

The company said in late November that it was shutting down many activities outside the mine next July, and was asking employees to schedule their vacations then.

However, a United Steelworkers union official told CBC News Wednesday that the company has told the union that the planned shutdown has been expanded to include the mine itself. As well, the shutdown will last several days longer than first announced.

The announcement comes as another blow to western Labrador, where the economy is built largely on mining. Wabush Mines, which operates a smaller iron ore mine in neighbouring Wabush, said earlier this month it will lay off about a third of its unionized staff while it slashes production in 2009.

IOC employs more than 1,600 people in Labrador.

One phase of IOC's planned expansion, which was announced in March, would have boosted production to 25 million tonnes per year by 2011.

IOC's expansion plans included new equipment at the open pit mine, the processing mill and the railway yard.

In early September, IOC had announced an additional $300-million investment.

Natural Resources Minister Kathy Dunderdale told the house of assembly Wednesday afternoon she was expecting to speak with IOC officials later in the day.