Tacora Resources has acquired the long-idled Wabush iron ore mines in the western part of Canada's Labrador province, which it plans to restart, the company said Wednesday.
Tacora has a five-year agreement with Cargill to sell all of the iron ore produced at the mine, the company said.
Larry Lehtinen, the founder of iron ore concentrate and pellet producer Magnetation Inc., and his son, Matt, the former company president, together started Tacora and said in a statement they purchased Wabush. Magnetation filed for bankruptcy protection in 2016 and was sold to ERP Iron Ore. Matt Lehtinen also said Tacora has entered into a new labor agreement with the United Steelworkers union of Canada, a statement confirmed by a union official in eastern Canada.
Larry Lehtinen also is a former vice president of Cleveland, Ohio-based Cliffs Natural Resources.
Tacora, a privately owned company based in Grand Rapids, Minnesota, has worked closely with the government of the Canadian province of Labrador and Newfoundland in trying to restart the mine, which was shuttered in 2014, taking with it about 500 jobs.
In late June, Labrador and Newfoundland officials announced that Tacora had been approved to purchase the Wabush assets, including the assignment of contracts, from Cliffs.
The approved purchase agreement includes the requirement for Tacora to provide financial assurances for environmental remediation. Tacora acquired the mine for C$2.05 million in cash and must pay another $18.75 million in environmental and other costs.
Tacora plans to complete a feasibility study later this year, after which the company will seek to raise additional capital needed to restart Wabush.
In a statement, Siobhan Coady, minister of natural resources for Labrador and Newfoundland, said the mine purchase approval marked "another important milestone in the efforts to restart Wabush mines. While a great deal of work yet remains to ensure Wabush mines is successfully reopened, approval of the agreement between Cliffs and Tacora takes us one step closer."
Wabush's projected production capacity was not disclosed.
