Nfld. & Labrador

Labrador West dealt another blow as IOC announces 150 layoffs

Labrador West has been dealt another significant economic blow, with the Iron Ore Company of Canada announcing Thursday that it's trimming its workforce in Labrador City by 150 employees.
The Iron Ore Company of Canada laid off 150 workers at the mine in western Labrador Thursday. (CBC)

Labrador West has been dealt another significant economic blow, with 150 layoff notices going out Thursday to unionized workers with the Iron Ore Company of Canada.

The workers are members of Local 5795 of the United Steelworkers, which represents some 1,400 people at the operation, said president Ron Thomas.

The layoffs come amid a significant drop in commodity prices, and many were expecting cost-cutting measures from the mining giant.

IOC is majority owned by Rio Tinto, and employs roughly 2,500 people in Labrador West and Sept-Îles, Que.

 Labrador City Mayor Karen Oldford said it was a "sad day" for the community, but the number was roughly what the town expected if there were going to be layoffs.

"All we can do is try to work with the families that are going to be affected and hope that the commodity prices will turn around quickly, just as quickly as they went down, in order to try to get people back to work," she said.

Earlier efforts by the company to cut costs at Labrador City failed, with the union overwhelmingly rejecting a proposed wage freeze in February. There was also very little participation in early retirement incentives.

This is the most significant job reduction at IOC since the early 1990s.

'Once the flood gates open'

Thomas was not available for an interview Thursday, but texted the word "terrible" when asked how he felt about the job cuts. 

Those classified as an operator/maintainer were hit hardest by the cuts with 118 positions eliminated, while 29 labourers will also lose their jobs.

Ron Thomas is a union local president with the United Steelworkers that represents workers at the Iron Ore Company of Canada mine in Labrador City. (CBC)
Those in the trades were largely untouched, but Mitchell Mouland, a mechanic and third generation employee with IOC, said there's still uncertainty.

"Once the flood gates open," there could be more layoffs on the horizon, Mouland, 22, told CBC News Thursday.

It's the latest hit to the area's economy.

In October, Cliffs Natural Resources shut down its mine in nearby Wabush, displacing nearly 500 workers.

Natural Resources Minister Derrick Dalley said in a statement Thursday government was "disappointed" by the announcement from IOC, but low prices of iron ore have had a continuing negative impact on the region.

"We will continue to monitor the situation with IOC and we will offer assistance to affected workers, just as we did for workers impacted by closure of the mine in Wabush," read the statement.

"Despite today's announcement, we remain optimistic regarding the long term potential for mining in Labrador West."

Challenging market conditions

 In a statement issued Thursday afternoon, IOC said it made the "difficult decision" to lay off the workers because of challenging market conditions, with a tonne or iron ore trading at just $47.50 as of Monday.

"Our operating costs need to go down even more to make us viable and IOC has taken steps to implement a number of changes as we strive to save as many jobs as possible," the statement read.

The layoffs will be effective June 14, and are for an indefinite period of time. The workers will remain on the company's recall list.


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