Dofasco’s Ontario mines set to close next year

The Adams Mine at Kirkland Lake and the Sherman Mine at Temagami will close in March next year because the operations are no longer cost competitive.

Dofasco said both mines have been in a very unfavorable cost position since 1985. This despite concerted efforts by the company and its employees to improve the situation.

The Sherman, along with its sister operation the Adams Mine, have the distinction of mining some of the lowest grade iron ore in North America. The iron formations at the mines average between 20%- 25% recoverable magnetite iron.

Small producers by industry standards, the two operations each produce about one million tons of low grade iron pellets per year for the company’s steel mills at Hamilton, Ont.

By comparison, most other iron ore mines in Canada and the U.S. have a capacity in excess of six million tons per year, and in most instances, have higher-grade ore.

Some of Brazil’s huge iron deposits have grades as high as 66% iron, which represent direct shipping ore, and are located close to ocean ports. Major blow

While the announcement came as a major blow to the 700 affected employees, the aftermath of the mine closures will be softened somewhat by a compensation and benefit program developed by the company.

Included in this package will be a special $4 million fund for regional development and a three year continuation on mine realty taxes valued at $3.8 million.

John McAllister, Dofasco vice- president raw materials said, “Our objective is to reduce, as much as possible, the effect of closure of the mines.”

He said the decision to close the operations was a very difficult one because of the impact it has on the employees and the communities involved.

Rene Fontaine, Ontario’s Minister of Northern Development affirmed that the government will make every effort to help the families and communities through this very difficult period.

In other news, the province’s attorney general recently said that the necessary legal steps are being taken to lift the “Temagami caution” so that mineral exploration can proceed again in the area. Airborne survey

The provincial mines division will shortly start up an airborne geophysical survey of the area to update the mineral information database. This will further encourage prospecting and exploration once the caution is lifted.

“However, government action without community participation is not the answer.” Fontaine said. “We are going to work with each community, the Union, and other groups to come up with projects that will be of benefit to the region.”

“I do not under estimate the magnitude of the challenge, but other communities have had to face this, and with the co-operation of all, they have faced it successfully,” he added.

To replace its Ontario mine production, Dofasco has accepted an offer to purchase 25% of USX Corp.’s Quebec Cartier Mine. The cost of the purchase was not disclosed.

USX Corp. currently owns 100% of the 18 million-ton-per-year mining operation, eight million of which is in the pellet form Dofasco uses. Dofasco is scheduled to receive two million tons of iron ore pellets from the Quebec Cartier Mine in the spring of 1990.

Dofasco is Canada’s largest supplier of flat rolled steels and the country’s second largest fully integrated steelmaker providing about 25% of Canada’s total steel production.

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