(Repeats with no changes to text)
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.
O‘Keeffe, who moved his family to Montreal, doesn’t see the market recovering quickly. That gives Champion the time to develop mine and processing plans, he said, that will reduce costs and boost annual production to 7.5 million tonnes from 6 million tonnes.
Pilot studies have already shown new processing equipment could help boost recovery rates to 80 percent from about 70 percent when the mine last operated, he added.
The timing and pace of any restart will likely be decided at year-end, he said, a call that boils down to costs.
There are few companies anywhere making concrete plans to start producing iron ore.
“Now is not the time to start new mines. Now is the time to work what is already up harder,” said Nev Power, chief executive of Fortescue Metals, the world’s No. 4 producer.
The “Big Three” - Rio, BHP Billiton and Vale - have been slashing costs to squeeze out higher-cost rivals.
Separately, Australia’s 55-million-tonne Roy Hill mine, combined with Vale’s development of a 90-million-tonne expansion, S11D, in Brazil, may add more than 10 percent to the global sea-borne iron ore supply, said Clarksons Platou Securities analyst Jeremy Sussman.
“In order to balance the market, we’ll need to see high-cost production come offline. And that’s going to be painful,” he said.
Iron ore from the remote Labrador Trough gets a premium for its high 66 percent concentration, versus the 62 percent standard, but is disadvantaged by its distance from the Chinese market.
Australia’s government forecasts a price of $55 per tonne next year, so “what we have to then ensure, is that our costs of delivering to China are below $55,” O‘Keeffe said.
That’s far from Bloom Lake’s 2014 cash production cost of $81 and the largest miners’ current cost of about $30 a tonne.
“They’re going to have their hands full,” said Clarksons’ Sussman, noting that Bloom Lake was in the top quartile for costs.
O‘Keeffe said company spending has been cut “significantly” and the mine is now free from costly rail and port access agreements. It could also benefit from planned government investments in that infrastructure.
Sandy Chim, the chief executive of neighboring miner Century Iron, said O‘Keeffe is “brave” to bet on an uncertain market.
“It is courageous to put it forward,” Chim said. “I like to see people take the first move in a particular area that we’re in. It would be good to have somebody being a catalyst.”
($1 = 1.3066 Canadian dollars)
$1 = 1.3922 Australian dollars With additional reporting by Jim Regan in Sydney; Editing by Paul Simao