ArcelorMittal may further expand Quebec mine
MONTREAL - ArcelorMittal may further expand its northern Quebec iron-ore mine by boosting annual production by another 25 per cent to 30 million tonnes.
The world's leading steel and mining company said Thursday that a scoping study has identified the potential to use the mine's existing infrastructure to increase annual production of iron-ore concentrate.
Several development options are being considered and "further expansions beyond that currently under implementation are being investigated."
Pre-feasibility and feasibility studies will now be commissioned, ArcelorMittal said from Luxembourg.
The company announced last May a $2.1-billion expansion of the Mont-Wright mining complex and construction at Port-Cartier near Labrador. The move would increase production from 14 to 24 million tonnes per annum by 2013.
That expansion was expected to create 8,000 construction and 900 mining jobs. That's in addition to the 1,100 people currently employed at the facilities.
No details were available about the potential timing of the possible expansion, the potential price tag or number of additional jobs that would be created.
Peter Kukielski, head of global mining for ArcelorMittal, said he has always known that the Canadian mine is a "flagship asset with considerable opportunity for expansion."
"This latest study marks the next step in realizing that potential," he stated in a news release.
ArcelorMittal uses the iron ore to make steel at its blast furnaces in Hamilton, Quebec and elsewhere.
It and owns the former Dofasco operations in Hamilton, one of Canada's major steelmakers.
The current Quebec expansion will help the company achieve its goal of growing its global iron ore production to 100 million tons by 2015.
Morningstar analyst Bridget Freas has said expansion is a key way for the company to shield itself from wild fluctuations in iron ore prices.
The expansion lowers its cost base and gives the company a more secure supply of the raw material.
Freas said ArcelorMittal's rivals would love to make similar moves but many don't have the cash or mining expertise to succeed.
With its 7.9 billion tons of iron ore reserves, Canada had nearly 42 per cent of the global resources as of 2009.
In February, ArcelorMittal said it lost US$1 billion in the fourth quarter as concerns over Europe's economy hit demand and it faced several large charges for taxes and restructuring.
ArcelorMittal has a portfolio of more than 20 mines in operation and development and is the world's fourth-largest iron ore producer. It has operations in more than 22 countries spanning four continents.
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