Major European iron ore concentrate producer Northland Resources has announced a change in strategy due to low iron ore prices. Northland´s long-term strategy has since 2010 been to develop the Kaunisvaara iron ore project to reach a yearly production of approximately 4 million mt of iron ore concentrate, with two processing lines in use.
With the new strategy, Northland will complete construction of the second processing line but will not put this line into production at current price levels. Focusing on production from the existing processing line significant cost reductions can be made, while simultaneously preserving ore resources and retaining long-term flexibility.
Additionally, to implement the new strategy while preserving liquidity, Northland has also decided to temporarily suspend payments to its suppliers and creditors. The new strategy will also affect the capability to keep the repayment time plan for creditors, set up as part of the reorganization in 2013.