QCM strike ends, iron demand stays high

An 8-week strike at Quebec Cartier Mining‘s Mont-Wright iron operations, about 300 km north of Pont Cartier, Que., ended shortly after former Quebec premier Lucien Bouchard entered the negotiations in late May.

In early April, hourly employees at Mont-Wright voted to strike after rejecting a second offer from Quebec Cartier.

Meanwhile, employees at Port Cartier, on Quebec’s north shore, who belong to the same union as the Mont-Wright workers, demonstrated their support by refusing to report to work despite having consented to a new collective agreement.

Quebec Cartier Mining, which employs 1,800 workers, of which 1,500 are unionized, is looking to capitalize on surging iron prices.

The Swiss-based Iron Ore Trust Fund says the iron ore industry is experiencing a “once in a life-time” boom.

Iron prices have climbed 71.5% in 2005, approaching levels not seen since the early 1970s, reflecting greater demand for steel in China.

Global iron ore production rose 11% in 2004 to reach 1.2 billion tonnes. Brazil remains the largest producer, at 270 million tonnes, followed by Australia, with 241 million tonnes. China is the largest importer of iron ore, accounting for a third (208 million tonnes) of global imports.

Starting in 2007, almost 300 million tonnes of iron are expected to be produced annually. Between 2008 and 2012, annual output is expected to rise to 550 million tonnes. Iron demand would have to grow at 7.5% annually to absorb the new capacity.

In 2006, however, prices will likely remain high, as the balance between supply and demand stays tight; they will fall in 2007 as new projects come on-stream.

Steelmaker Dofasco (DFS-T) owns a third of Quebec Cartier Mining and recently agreed to buy the remaining two-thirds from Companhia Auxiliar de Empresas de Mineracao e Metalurgia (CAEMI) of Brazil and Investissement Qubec.

Quebec Cartier operates the largest open-pit mine in Quebec, as well as a crusher-concentrator at Mont-Wright. The Cartier Railway Co. links the mine to the company’s head office, port and pellet plant in Port Cartier.