US-based mining firm Cliffs Natural Resources is considering closing its Bloom Lake iron ore mine in Canada after deciding that the expansion plan is not viable.
The closure is part of the company’s plan to exit its Eastern Canadian iron ore operations.
Cliffs had previously said it would not go ahead with the Bloom Lake project if an investment of $1.2bn was not arranged by the end of this year.
Stopping production at the mine is expected to cost $650m to $700m over the next five years.
Cliffs Natural Resources chairman, president and CEO Lourenco Goncalves said: "Despite the continued interest of the prospective equity partners in Bloom Lake and in its high-quality ore, the potential investment is not achievable within a timeframe acceptable to Cliffs.
"With expansion no longer viable, we have shifted our focus to executing an exit option for Eastern Canadian operations that minimises the cash outflows and associated liabilities."
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The Bloom Lake property is located in the southwestern corner of the Labrador Trough iron range, near several producing mines.
Cliffs Natural Resources has also lost an arbitration claim against a former buyer of iron ore from Bloom Lake. Damages of around $71m were awarded against the company.
The company produces iron in the Great Lakes region as well as high and low-volatile metallurgical coal in the US. It also operates an iron mining complex in Western Australia.