Debt-ridden Baffinland Iron Mines Corp. is seeking court approval in Ontario to sell its assets in a bid to prevent the closure of its Nunavut mine. The company’s legal representatives emphasized the necessity of a sale to avoid liquidation, which would lead to the shutdown of the mine and the loss of more than 1,200 jobs.
Baffinland, the owner of the Mary River Mine in northern Baffin Island, is a significant employer in Nunavut. With debts amounting to $2.6 billion owed to 231 creditors as of May 14, including several local businesses and organizations, the company faces financial challenges.
After receiving creditor protection and a $660 million loan from federal Export Development Canada, Baffinland is now seeking court authorization to invite bids for the sale of its shares, assets, or the entire mine. The company’s interim CEO, Jowdat Waheed, highlighted this in a sworn affidavit dated September 17.
In a statement, Baffinland’s spokesperson, Peter Akman, reiterated the company’s commitment to prioritizing safe operations, supporting its employees, and collaborating with Inuit partners and northern communities amidst the ongoing financial restructuring.
The financial woes of Baffinland are partially attributed to the unsuccessful Phase 2 railway expansion proposal that incurred costs exceeding $1.5 billion. The proposed expansion faced opposition and hearings, ultimately leading to its rejection by the federal government following community objections in north Baffin.
Baffinland is scheduled to present its case before an Ontario judge on Friday to seek approval for the asset sale.