Canada iron ore miner Alderon to cut jobs, defer payments to save cash

Tue Dec 9, 2014 1:26pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

Dec 9 (Reuters) - Alderon Iron Ore Corp, the company with the most advanced project in Canada's iron ore-rich Labrador Trough region, said on Tuesday it will cut jobs and defer an interest payment as iron ore prices remain at five-year lows.

Alderon declined to say how many jobs it will cut but said it will not reduce its core executive team as it continues to seek financing to develop its $1.3 billion, construction-ready Kami project. The Montreal-based company employs around 20 to 30 people, spokeswoman Evelyn Cox said.

"We are working more closely than ever with our partner Hebei Iron and Steel on increasing Chinese participation in the project in order to increase access to available capital from China," Mark Morabito, Alderon's Executive Chairman said in a statement.

Hebei, China's biggest steelmaker, owns 25 percent of the Kami project. Alderon, which is looking to raise $1 billion in debt to build the project, owns the rest.

Alderon is the latest company in the Trough region, a mineral-rich belt running through northern Quebec and Labrador provinces, to take steps to preserve funds after iron ore prices nearly halved this year to below $70 a tonne. Cliffs Natural Resources is planning to close its Bloom Lake mine in the area and Labrador Iron Mines in July halted operations for this year due to low prices.

Alderon said investor Liberty Metals & Mining Holdings, which has lent it C$22 million ($19.24 million), has agreed to Alderon deferring two upcoming interest payments to end-2018.

Alderon's stock rose 1.9 percent to 27 Canadian cents on the Toronto Stock Exchange on Tuesday. Two years ago the stock was above $2.

(1 = 1.1432 Canadian dollars) (Reporting by Nicole Mordant in Vancouver; Editing by James Dalgleish)