Australians buy a big slice of IOCC pie

Australian-listed North has struck a US$230-million deal for a 59.3% stake in Iron Ore Co. of Canada (IOCC), Canada’s largest producer of iron ore.

The Melbourne-based company bought a 37.6% interest held by Bethlehem Steel (BS-N) and a 21.7% interest held by National Steel. IOCC’s other shareholders include: Mitsubishi with 21.8%; Labrador Iron Ore Royalty Income Fund with 12%; and Dofasco (DFS-T) with 6.9%.

IOCC operates an open-pit mine, a concentrator and a pellet plant in Labrador City, Nfld., and a deep-water port in Sept-Iles, Que., where the firm is headquartered. A 420-km-long rail line linking the two towns is also owned by IOCC. Proven reserves at the mine total 833 million tonnes grading 38.4% iron, sufficient for 20 years of production at current levels. Iron there occurs as specular hematite and magnetite.

In 1995, IOCC produced 10 million tonnes of pellets and 5 million tonnes of concentrates which were sold mainly to North America, Europe, Japan and Taiwan. IOCC’s sales to North America will continue to be made under long-term contracts, primarily to Bethlehem, National and Dofasco, at market prices.

North’s previous annual iron ore production at its Robe-River mine in Pilbara, Western Australia, was less than half IOCC’s, and was sold mainly to Asian markets.

North plans to increase productivity at IOCC, which is also one of the world’s leading producers of pellets, and may recommission the Sept-Iles pellet plant. The company also plans to enter the electric arc furnace market by producing high-quality, direct-reduction-grade pellets.