(Reuters) - Iron ore miner Labrador Iron Mines Holdings Ltd LIM.TO said it lowered its exploration budget for the year as a decline in iron ore prices forces it to cut costs.
The exploration program for the year has been cut to C$5 million from the original budget of C$8.6 million. The miner also deferred capital expenditure relating to its Silver Yards processing plant and Houston deposits in Quebec.
"Our current second quarter is being impacted by the rapid drop in spot iron ore prices," Chief Operating Officer Rod Cooper said in a statement.
Iron ore prices have dropped by a third, or almost $50 per tonne, since July, as Chinese steel producers shun cargoes and the appetite of the world's largest consumer cools.
The Toronto-based company owns 20 deposits in the iron-rich Labrador Trough region, which straddles the border between Quebec and the province of Newfoundland and Labrador.
Labrador Iron Mines said it remains on track to meet its 2012 sales target of 2 million tons (2.20 million tons) of iron ore at a cash operating cost of $60-$65 per tonne.
Shares of the company closed at C$1.71 on Friday on the Toronto Stock Exchange.
Reporting by Maneesha Tiwari in Bangalore; Editing by Saumyadeb Chakrabarty