Rio Tinto subsidiary Iron Ore Company of Canada (IOC) has announced its plans to proceed with the Wabush 3 project after securing approval for a C$79m ($60.33m) investment.

IOC plans to develop the new pit Wabush 3, which is located within its existing mine operations. This will extend the life of the mine, increase production of quality grade iron concentrates and pellets, and decrease operating costs.

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IOC chief executive officer and president Clayton Walker said: “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.

“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.

“I would like to thank IOC employees, unions and members of the community for the ongoing support they have demonstrated, which helps to build trust in our ability to create a viable business for future generations.”

The company has secured all necessary regulatory and environmental approvals.

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"This provides a compelling opportunity to make our business more competitive by reducing operating costs during a period of increasing iron ore price volatility."

It intends to start construction in the second quarter of this year.

The mine is expected to produce first ore in the second half of the next year, which will increase IOC’s annual capacity from the exisiting 18 million tonnes to 23 million tonnes.

Wabush 3 will be integrated into the IOC’s overall Labrador City Operations.

The mine will be developed using the company’s existing maintenance, ore delivery, processing and tailings management facilities in the region.

Image: An Iron Ore Company of Canada (IOC) project. Photo: courtesy of Rio Tinto.