Wabush 3 mine put on hold, IOC tells employees

The $250-millionWabush 3 mining project in westernLabrador has been put on hold due to poor performance at the Iron Ore Company of Canada, the president of the company told workers on Monday.

Company president Kelly Sanders wrote in an all-staff memo that the development of the open-pit mine has been deferred as a "full review of IOC performance is conducted."

"This difficult decision was based on a number of factors including lower cash generation, shortfall in production, and failure to ship the quantity and quality of product to customers as scheduled," he said.

The proposed mine is seen as an important economic generator for Labrador West. It was sanctioned by the provincial government just last September, but delayedby IOC in December.

• Wabush 3 mine a 'critical piece' of IOC's future, says president
• Another blow for Labrador as IOC delays Wabush 3 project

The construction of the open-pit mine was expected to create 2,400 "person-months" of employment.

Monday's letter comes with direct criticism of mine employees, just as the mine's union was turning up the heat in an on-going labour battle.

"The result of skipped shifts left trucks idle and production well below demonstrated capabilities," Sanders wrote. "These issues...are simple to overcome by a highlycapable team."

Sanders wrote that the company is still reviewing its strategy.

Previously, the company described Wabush 3 as "critical" to the ongoing viability of IOC.