Debt-laden Baffinland Iron Mines Corp. has petitioned an Ontario court to approve the offloading of its assets to prevent the potential “liquidation” of its Nunavut mine.
According to the company’s legal representatives, a sale is deemed necessary at this juncture to avert the mine’s shutdown, which could result in the displacement of more than 1,200 workers. Baffinland is the proprietor of the Mary River Mine situated on northern Baffin Island and is a key employer in Nunavut.
As of May 14, the company was in debt to the tune of $2.6 billion owed to 231 creditors, which included approximately a dozen businesses and organizations from the northern regions, as per the company’s filings back then. In a bid to navigate its financial challenges, Baffinland had earlier obtained creditor protection and subsequently secured a $660-million loan from the federal Export Development Canada.
The company is currently seeking court endorsement to initiate a bidding process for the sale of its stocks, assets, or the entire mine, as stated by Baffinland’s interim CEO Jowdat Waheed in a sworn affidavit dated September 17.
In a statement, Baffinland’s spokesperson Peter Akman reiterated the company’s commitment to ensuring safe operations, supporting its workforce, and collaborating with its Inuit partners and local communities.
The financial woes of Baffinland are partially attributed to the collapse of its proposed Phase 2 railway expansion project. Earlier disclosures from the company revealed expenditures exceeding $1.5 billion on the failed expansion plan, which faced rejection by the federal government following prolonged hearings and resistance from certain communities in north Baffin.
Baffinland is scheduled to present its case before an Ontario judge on Friday.
