Quebec Government Prepared to Buy Cliffs Assets to Save Bloom Lake Iron Mine

Bloomberg reported that the Quebec government is prepared to buy the rail line and port facilities at Cliffs Natural Resources’ (NYSE:CLF) Bloom Lake property to make it easier for new owners to reopen the iron ore mine.

As quoted in the press release:

The government also is open to buying 20 percent of the Bloom Lake mine to facilitate a deal, Economy Minister Jacques Daoust said. Purchasing the rail and port facilities could lower the mine’s operating costs by as much as $20 a ton, he said.

The assets Quebec would buy include a 32-kilometer (20-mile) rail line that connects the mine to another railway. Cliffs also owns storage and loading facilities at Pointe-Noire on the Saint Lawrence River, and has rights of use and access to a dock under an agreement with the local port authority.

Because of the dock’s limited capacity, iron ore was often loaded onto smaller ships that ferried the mineral to ocean-going vessels in the Bay of Sept-Iles for transport overseas. The last iron-ore shipment left Pointe-Noire in January, according to the Jan. 26 filing.

Click here to read the full Bloomberg report.