TORONTO—Labrador Iron Mines Holdings has a new two-year agreement to sell all of its production to Iron Ore Company of Canada.
Toronto-based LIM will receive an advance payment of $35-million to be credited towards future sales of at least 3.5 million tonnes of iron during the 2013 and 2014 calendar years.
The advance payment will be financed by an international commodity trading house, RB Metalloyd Ltd.
Under the previous two-year agreement, LIM sold two million tonnes to Iron Ore of Canada, which resold it at prices linked to China’s daily spot price.
Labrador Iron Mines said the advance payment will enable it to ramp up production and complete improvements at its processing plants, which are in western Labrador near the with Quebec.
IOC, Canada’s largest iron ore producer, is controlled by Anglo-Australian mining giant Rio Tinto PLC, which owns 59 per cent of its stock.
Japan’s Mitsubishi Corp. owns 26 per cent of IOC and Labrador Iron Ore Royalty Co. owns 15 per cent, according to IOC’s website.