Iron ore
A labourer shovels iron ore into a steel ladle at Wuhan Iron and Steel Group in the capital of central China's Hubei province, October 17, 2007. Reuters/Stringer

Iron Ore Company of Canada (IOC), majority-owned by Rio Tinto, will be working on the Wabush 3 project. The company announced its plans after securing a C$79 million (AU$78.04 million) investment approval.

The site of the new pit will be constructed close to the Luce pit, the company announced last week. The Luce pit is part of its Carol project in Labrador City. The expansion of the Wabush 3 project was approved by the provincial government in September 2015.

As reported by CBC News, the investment will allow the output to up by around 5 million tonnes a year in addition to extending the life of the mine by 12 years. Labrador West – an iron-ore producing centre, which has been deeply affected by the mining meltdown – will benefit immensely from the 70 or so jobs the project will likely create.

“This value-driven investment will deliver significant benefits for our business, employees and surrounding communities in Labrador West and Sept Iles for many years to come, by increasing the life of the mine and allowing us to offer continued employment opportunities,” IOC chief executive officer and president Clayton Walker said. “The Wabush 3 pit is IOC’s best option to access low-cost, quality ore and provides a compelling opportunity to make our business more competitive by reducing operating costs during a period of increasing iron ore price volatility.”

The Wabush Mines was shuttered in 2014 due to low iron ore prices. As a result, as many as 500 employees lost their jobs and a few were left to take care of maintenance. Wabush Mines were owned by Cliffs Natural Resources.

Wabush 3 project consists of four operating open pit mines (Humphrey Main, Humphrey South, Sherwood Pond and Luce), two dormant pits (Lorraine and Spooks), one completed pit (Smallwood); and two new deposits (Wabush 3 and Wabush 6).

The first ore in the mine is expected to be produced in the second half of the next year. This will aid in enhancing IOC’s yearly capacity from 18 million tonnes to 23 million tonnes.

The news of the project was welcomed by Canadian Minister of Natural Resources Siobhan Coady. On Thursday, she said the development was “good-news story for the province.”

"It will mean 12 more years of work in the mining industry in Lab West," she said. "Incredible stimulation to the area of Labrador, and the IOC area. It's a really good opportunity, I think, for growth and development." ​