TORONTO, Feb. 27 /CNW/ - Labrador Iron Ore Royalty Income Fund (the "Fund") attaches a press release issued today by Iron Ore Company of Canada ("IOC") announcing that due to the sharp drop in world demand for raw materials, including iron ore, IOC found the refurbishment of its Sept-Iles pellet plant (which has been idle since 1981 and was partially refurbished in 2001) to no longer be viable and decided not to proceed with the project. The trustees of the Fund support this decision as it will allow IOC to concentrate its efforts on its current operations. The impact of this write down has been reflected in the Fund's financial statements for the year ended December 31, 2008.
Press Release ------------------------------------------------------------------------- Iron Ore Company of Canada
IOC ceases efforts to develop Sept-Iles pelletizing plant
Montreal, Sept-Iles, Labrador City - February 27, 2009 - Iron Ore Company of Canada (IOC) announces that, following a decision by its Board of Directors, it has ceased efforts to develop the Sept-Iles pelletizing plant.
"The decision has become necessary in the context of the global economic recession," said Terence Bowles, President and CEO, IOC. "We are experiencing an unprecedented drop in world demand for raw materials, including steel and iron ore. As a result, the Sept-Iles pelletizing plant restart project is no longer viable and we have decided not to proceed with it and concentrate on initiatives that can add more value."
Opened in 1973, the Sept-Iles pelletizing plant has been idle since 1981. It was partially refurbished during 2000-2001. The current decision will therefore have no impact on the number of IOC employees.
The pellet plant buildings will be kept intact for the foreseeable future, as they house important utilities that service IOC rail and port facilities. The dismantling and removal of processing equipment will commence shortly.
IOC is the largest manufacturer of iron ore pellets in Canada and its customer base covers North American, European, and Asian steel producers. The Company operates a mine, concentrator and pelletizing plant in Labrador City, Newfoundland and Labrador, as well as port facilities located in Sept-Iles, Quebec. It also operates a 418 kilometre railroad that links the mine to the port. IOC has approximately 2,000 employees, and its major shareholder and operator is the international mining group Rio Tinto, which has activities in more than 40 countries throughout the world.
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