IOC mum on report that Rio Tinto may spin off company

The Iron Ore Co. of Canada is not commenting on a new report that its majority owner mining giant Rio Tinto is considering listing IOC on the Toronto Stock Exchange, just a few months after the end of a strike at its western Labrador mine.

"We've been surprised and shocked before and as long as we're in [the iron ore] industry that will remain the case," Labrador West MHAGraham Letto said.

"We've had several owners at IOCthat have come and gone, and this is just another chapter in the life of IOC."

The Reuters wire service quoted unnamed "banking and industry sources" in a report Thursday that suggested Rio Tinto was hoping to take advantage of healthy prices in the iron ore market.

"Iron ore, which accounts for most of Rio's profit and is used in making steel, has provided healthy margins for years but the outlook is uncertain as major buyer China is expected increasingly to rely on recycling rather than importing raw material," Reuters reported.

IOC referred a CBC query for comment to Rio Tinto. Matthew Klar, chief advisor for media relations for Canada and the Americas, said Rio Tinto is "declining to comment."

Reuters reported that Rio Tinto the No. 2 publicly traded mining company in the world had an eye on IOC for a listing on the Toronto exchange "as part of its ongoing work to hold only its best assets."

'Down this road before'

Letto said he wasn't surprised by the news and that they'd been down this road before.

Rio Tintoacquired nearly 60 per cent of IOCshares duing thea hostile takeover of Australian company North Ltd. in the year2000 with the intention ofgrowing itsAustralian assets.

"IOCHappened to be a part of the North assets at the time," Letto said.

"Since that time, they've really been testing the markets anyway to get rid of that asset."

Strike ended in spring

Rio Tinto reached a deal with striking IOC workers in Labrador City in May, in a labour dispute that saw defiant workers reject a tentative deal a month earlier.

About 1,300 workers spent about two months on the picket line.

Rio Tinto, which bought a controlling stake IOC in 2000, has been tempted to sell off those assets in the past. In 2012, it launched a plan to sell off IOCbut later abandoned it after finding insufficient interest from private equity firms.

"I'm not totally surprised to see this, I've been expecting it for some time actually since the iron ore prices started to rebound," Letto said.

"Now that the price is up again that we see that the interest again, trying to sell their assets that they felt that they didn't need."

Thursday's report from Reuters noted that IOC had revenues of $1.9 billion in 2017. IOC's minority owners are Mitsubishi Corp. and the Labrador Iron Ore Royalty Co.

"I know when it was put on the market a few years ago that there were several other companies who were kicking the tires," Letto said.

"I think there's all kinds of possibilities who any potential bidders may be."

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