IOC slashes donations
Donations one of several slashes for company in 2015
Economy prompts community funding cuts.
The Iron Ore Co. of Canada (IOC) in Labrador City has announced the suspension of community sponsorships.
The company cites not meeting production plans and the falling Canadian dollar as causes for cost-cutting measures across the board.
Annual donations from IOC typically range from $250,000300,000, not counting in-kind donations such as materials, equipment and human resources.
IOC director of external relations Heather Bruce-Veitch said positive feedback was received from a letter sent to all community partners, who were understanding.
“It impacts their plans, but we’re looking at trying to avoid a lengthy shutdown to avoid losing jobs,” she said.
Suspending donations for 2015 is one of several moves IOC has made since the start of the new year.
Early retirement packages were offered to workers with at least 30 years of service, or 10 years of service for those who are older than 62, and included a $25,000 bonus, and salaries were frozen a month before a wage increase was due.
(As of publication, the company was awaiting word about whether the United Steelworkers union accepted its request for a wage freeze).
Contractors are also being asked to do what they can to help cut costs.
Bruce-Veitch said the company also asked Premier Paul Davis to look at bigger-ticket items increasing costs, such as the $35 million rate increase for power.
“We’re trying to look at all alternatives so we don’t repeat mistakes of others who thought this was short-term, when it’s likely long-term.”
Economic pressure
Labrador West MHA Nick McGrath said it’s a big hit for the community, but a necessary decision for the company.
“While I’m not happy to see it, I understand where they’re coming from,” said McGrath. “Look across the lake — Wabush closed, Bloom Lake shut down, Alderon is on hold. IOC is no different than any other mine, trying to curtail the downturn and survive.”
The state of the economy is putting pressure on everyone, McGrath said.
“Local groups are in the same situation as businesses, whether small or large. They’re going to have to do their best to deal with the downturn in the economy and survive through it.”
McGrath said it’s important the community understands how serious the situation is, with oil and iron ore prices having a major effect on the provincial economy.
“We’re looking at every way to keep costs down and get through this while facing a major deficit. We need to see some turnaround in the economy. Until that happens, we need to work together through this and, hopefully, everybody will survive.”