The Scully iron ore mine in Wabush, Newfoundland and Labrador, Canada, looks like restarting after owner Tacora Resources secured up to $276 million of funding to turn the lights back on.
Just this week, the company announced it had closed on $212 million in private equity and senior secured debt financing which, together with existing commitments for up to US$64 million in mining equipment debt financing, will fully fund the restart.
Tacora purchased substantially all the assets associated with the Scully mine on July 17, 2017. In the subsequent months, it completed a feasibility study that confirmed the viability of Tacora’s restart plans for the mine, secured life of mine access to rail transportation services and ship loading infrastructure, including access to a deep water port with Société ferroviaire et portuaire de Ponte-Noire and the Port of Sept-Iles, and concluded various regulatory matters with the Government of Newfoundland and Labrador, including consultations with local indigenous peoples.
The company is now hoping mining will recommence in June 2019.
Larry Lehtinen, Executive Chairman and CEO of Tacora, said: “We are extremely pleased to have the Scully mine restart fully financed and to move forward with hiring the workforce and implementing the various commercial contracts and capital projects to bring the Scully mine back to life.”
As part of the financing, trading company Cargill has made an equity investment and extended its long-term offtake agreement for Scully.
Lee Kirk, Managing Director of Cargill’s Metals business, said by extending this agreement through 2033, the company was “better positioned to provide our customers around the world with greater access to high quality iron ore”.
The previous owners, Cliffs Natural Resources, shut down Scully in 2014 as global prices for iron ore plummeted.
It is expected to produce some 6 Mt/y of high-grade concentrate when fully ramped up.
Works on the project include the installation of a manganese reduction line, concentrator upgrades, the construction of an additional load-out bin and improved material handling equipment at Pointe Noire.