UPDATE 1-ArcelorMittal suspends Quebec mine project on weak market

Thu Jun 2, 2016 3:23pm EDT
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(Updates with additional comments from ArcelorMittal)

By Susan Taylor

TORONTO, June 2 (Reuters) - ArcelorMittal, the world's largest steelmaker, is suspending a major project at its Mont-Wright iron ore mine in northern Quebec due to poor market conditions, the company said on Thursday.

The company, which employs some 2,500 workers at the mine, informed the United Steelworkers union this week that it will not start an "offload" project in June as planned. The project, which removals surface layers overlaying the deposit, would have extended the mine's lifespan by 15 years to 2045.

The decision was based on the project cost, "fairly high" mine production costs, low iron ore prices and global competition, said ArcelorMittal spokesman Paul Wilson.

Oversupply and waning demand have depressed spot iron ore prices .IO62-CNI=SI to $49.30 a tonne, down from an all-time high of about $190 in 2011.

"Due to the current iron ore market conditions and the resulting need to reduce ArcelorMittal Mining Canada's operating costs further, one specific project - which was originally due to start this summer - has been indefinitely delayed," ArcelorMittal Mining said in a statement.

"ArcelorMittal Mining Canada is in discussions with unions regarding the best way to proceed with this project."

Current annual production at Mont-Wright is 27 million tonnes with cash production costs of $25 per tonne, the company said.   Continued...