VANCOUVER (miningweekly.com) – Iron Ore Company of Canada (IOC), a subsidiary of Rio Tinto, will proceed with the C$79-million Wabush 3 expansion project at its remote iron-ore mine in the Labrador Trough of Newfoundland and Labrador.

Wabush 3 is a new pit that will be developed within IOC's existing mine operations to extend the life of the mine, reduce operating costs and increase the production of high-grade iron concentrates and pellets at the existing concentrator and a pelletising plant, in Labrador City. The Wabush 3 pit will be developed next to the Luce pit.

"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,” IOC president and CEO Clayton Walker stated on Thursday.

Managed by the Rio Tinto Iron Ore group, IOC is a joint venture between Rio Tinto (58.%), Mitsubishi (26.2%) and the Labrador Iron Ore Royalty Income Corporation (15.1%).

IOC said all key regulatory and environmental approvals are in place and construction is expected to start in the second quarter. First ore from production mining is expected in the second half of 2018, helping IOC ramp up capacity from 18-million tonnes to 23-million tonnes a year.

The project was put on hold in late 2015, on the back of negative global market conditions. It was delayed again in 2016, while the company conducted a performance review owing to production shortfalls.

Walker added that the value-driven investment will deliver significant benefits for IOC's business, employees and surrounding communities in Labrador West and Sept-Îles for many years to come, by increasing the life of the mine and allowing the company to offer continued employment opportunities.

Wabush 3 will be fully integrated into IOC's overall Labrador City operations, and will use its existing maintenance, ore delivery, processing and tailings management facilities as well as other aspects of IOC's current infrastructure and activities in the region.

Iron-ore prices for delivery in China hit a near three-year high of $94.86/t on Tuesday.