RPT-Australian miner eyes second bonanza with Canadian iron ore bet

Tue May 31, 2016 7:00am EDT
 
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By Susan Taylor

MONTREAL May 31 (Reuters) - An Australian mining veteran who made investors billions with a shrewd bet on coal in Mozambique is aiming for another big score with Canadian iron ore, even as a global gush of new supply threatens to depress already slumping prices.

Champion Iron Chief Executive Michael O'Keeffe is laying the groundwork to restart Bloom Lake mine in northern Quebec's metals-rich Labrador Trough.

Champion bought Bloom Lake last year for only C$10.5 million ($8.04 million) after Cliffs Natural Resources, which paid $4.9 billion for it in 2011, put the unprofitable mine into creditor protection.

Champion will have its work cut out. The spot iron ore price .IO62-CNO=MB is sputtering at $51 a tonne, down from an all-time high of about $190 in 2011, as an already oversupplied market absorbs ore from new mega-mines.

Best known for turning Riversdale Mining from a coal explorer in Mozambique with a market cap of A$7 million ($5 million) into a producer that Rio Tinto acquired for nearly A$4 billion in 2011, O'Keeffe says he's "measured and controlled" - anything but a gambler.

"I pride myself on being able to pick the bottom," he said in an interview with Reuters.

Rio, however, wrote off its investment in Riversdale a few years later and fired its CEO over the failed venture.   Continued...