Business
LIM signs iron ore sales agreement
LIM signs iron ore sales agreement.
About this update from Anglesey Mining Plc
[{"type":"text","content":"\n \nAnglesey Mining plc LSE:AYM\n\n15 August 2011\n\nLIM signs Iron Ore Sale Agreement with IOC\n\nAnglesey Mining's 33% owned associate Labrador Iron Mines Holdings Limited\n(TSX: LIM) is pleased to report that it has entered into an agreement with the\nIron Ore Company of Canada (\"IOC\") for the sale and shipping of all of LIM's\n2011 iron ore production.\n\nIron ore from LIM's new James Mine in northwest Western Labrador is currently\ntransported by rail from its Silver Yards rail head, near Schefferville, via\nthe TSH railway and the Quebec North Shore and Labrador (QNS&L) railway, to the\nPort of Sept-Iles where the ore is unloaded and stockpiled, adjacent to LIM's\nPoint-aux-Basques dock facilities leased from the Port of Sept-Iles.\n\nUnder the confidential sales contract with IOC, the iron ore will be delivered\nto Asian markets and resold by IOC's marketing organization on the spot market.\nThe sale price for iron ore sold to IOC will be based on the actual realized\nprices to Chinese customers, less an allocation for handling, loading, shipping\nand sales costs.\n\nIOC is Canada's largest iron ore producer from its mines located in Western\nLabrador and is a leading global supplier of iron ore pellets and concentrates.\nIOC's major shareholder and operator is the international mining group Rio\nTinto which has activities in more than 40 countries throughout the world. IOC\nowns 100% of the QNS&L railway and, at the Port of Sept-Iles, owns established\nstorage and ore handling facilities, including its ship dock capable of taking\nocean going vessels up to 240,000 (dwt) tonnes.\n\nLIM has previously entered into a life of mine, confidential rail\ntransportation contract with QNS&L for the rail transportation of LIM's\nproducts on the QNS&L railway. This contract provides for a confidential\ntariff, with capacity and volume commitments on the part of each party.\n\nLIM's agreement with IOC will enable utilization of Cape Size Ocean going\nships, where current freight rates are lower than for the alternative but\nsmaller Panamax vessels, for the shipment of LIM's iron ore.\n\nLIM believes that the benefits associated with this arrangement, together with\nthe benefits of the utilization of larger ships, will ensure that the maximum\npossible tonnage of LIM's iron ore will be efficiently shipped and sold d...