Nfld. & Labrador

Alderon confirms $1M offer to buy Wabush Mines

Alderon Iron Ore Corp. has confirmed it made a million-dollar offer to buy Scully Mines in Wabush, so it can dispose of waste from the proposed Kami project.

Plan would see mine site used to dispose of waste material from Kami iron ore project

Alderon says it has put down a $250,000 deposit on its offer to buy assets of Wabush Mines, which is now in creditor protection. (Chris Ensing/CBC)

Alderon Iron Ore Corp. has confirmed it made a $1-million offer to buy Scully Mines in Wabush, saying it wants to use the mine site to dispose of waste from its proposed Kami project.

The detail is contained in a news release Wednesday outlining the economic impact of the company's business plan for a brand new $900-million mine in western Labrador.

The Kami project is in the Labrador Trough, next to Wabush and Labrador City, and Alderon is reactivating its plan because of a projected improvement in iron ore prices. 

The company has made no secret of its wish to use part of the Wabush Mines site to bury its tailings. The site has been tied up in regulatory proceedings since it was shut by Cliffs Natural Resources in 2014.

Alderon's economic impact assessment says the Kami project would generate more than $2.2 billion in worker income and $1.8 billion in revenue to the N.L. treasury. (CBC)

"The Company has offered to pay $1,000,000 and assume certain liabilities and obligations associated with ownership and operation of the Scully Assets," Alderson said in its Wednesday statement, adding that it has made a $250,000 deposit.

The offer is among those being considered by FTI Consulting, which has not said who else put down a required deposit by the March 27 deadline. 

Ron Barron, a former Wabush mayor as well as a former mine worker, says people in the region want the mine to be sold to someone who will operate it as a mine, not as a tailings pond.

"There are ore reserves that are in the ground that can benefit this region and this province as a whole," he told CBC News on Monday.

Creditor proceedings are scheduled to end June 30.

The Kami project, meanwhile, is being touted by Alderon CEO Mark Morabito as an economic boon for Labrador and Quebec.

"In Newfoundland and Labrador alone, we expect that Kami will create approximately 32,000 direct, and spinoff jobs, generate more than $2.2 billion in total incomes to workers and businesses and contribute more than $1.8 billion in much needed revenue for the provincial treasury," he said in a statement Wednesday.