NEW YORK Canadian iron ore development company Baffinland Iron Mines Corp. has scaled back its investment plans for the Mary River project because of lower steel prices and rising borrowing costs.
"In the current global financial environment, the large development capital cost for the Mary River project is difficult to finance," Erik Madson, Baffinlands vice president of sustainable development, said in a letter to the Nunavut Impact Review Board.
The Toronto-based company now wants to build the mine under a phased approached that will reduce up-front capital requirements.
The project initially called for the construction of a new railway and port, as well as year-round shipping. The new plan calls for iron ore to be shipped from the existing Milne Inlet port to Rotterdam and Amsterdam, both in the Netherlands, and other European ports from July to October.
The company also cut its estimate for initial iron ore production to 3.5 million tonnes per year from 18 million tonnes annually.
Executives from Baffinland briefed both the government of Nunavut and community legal representatives Nunavut Tunngavik Inc., Iqaluit, Nunavut, on Jan. 10.
Toronto-based Nunavut Iron Ore Inc. and Luxembourg-based ArcelorMittal SA each have a 50-percent share in Baffinland Iron Mines.
The mine is expected to take five years to build and has a reserve of 18 million tonnes per year of high-grade lump and fines. Its located in the Qikiqtani region of Nunavut territory in the Canadian Arctic.
A version of this article was first published by AMM sister publication Steel First.