Wabush Mines facing permanent closure, mayor warns

The owner of the idled Wabush Minesiron ore operation in western Labradoris moving ahead with plans to close it for good.

Officials with Cliffs Natural Resources, which shut down activity at Wabush Mines in February, met Wednesday evening with town officials.

Wabush Mayor Colin Vardy said Cliffs has told the town it is now exploring its options for a permanent closure, and confirmed that sales talks with potential buyer MFC Industrial have broken off.

"They told us that as per their conversation we had in February that if they were unable to sell it within a period of time, that they would look at closure, and they are continuing to look at closure due to the sale breaking off," Vardy said.

Cliffs had set a timetable of about a year to find a new buyer.

About 500 people were laid off in February. About 50 workers have been kept on the site for maintenance during the idling period.

Wabush Mines was long considered the more marginal of two iron ore mines in the region, behind the much larger Iron Ore Company of Canada mine in neighbouring Labrador City.

The iron ore market has been in a downturn during the period when Cliffs sought a new buyer for the mine.

Earlier this month, the Newfoundland and Labrador government suspended work on clearing ground for a transmission line which would funnel electric power from Churchill Falls to western Labrador.

• Labrador power line suspended as Alderon works on financing

That's because Alderon Iron Ore is still trying to shore up financing for its proposed Kami mine project.