Northland’s Kaunisvaara mine in June, 2014.
Swedish Northland Resources (OSE: NAUR) said Monday that the Lulea District court has approved the company’s request for bankruptcy as it became impossible for the iron ore miner to deal with its more than $650 million in debt.
“The dramatic fall in iron ore prices this year made it impossible to raise the required financing, which was a prerequisite for continued operations,” Northland board Chairman Olav Fjell said in an earlier statement.
The Oslo-listed company, which employs over 800 people at its northern Sweden iron ore mine, had been have been trying to attract investment over the past 18 months. But in October this year, the company was forced to stop all operations and most employees got a notice of termination.
Spot iron ore prices have fallen almost 50% this year as low-cost producers such as Vale (NYSE:VALE), Rio Tinto (LON:RIO) and BHP Billiton (ASX:BHP) have boosted production. Top consumer China, on the other side, has slowed down the demand.
Trading on the company’s shares and bonds have been halted since December 5th and will remain so as bankruptcy proceedings continue, the company said.
The miner’s bankruptcy filing includes subsidiaries Northland Sweden AB, Northland Resources AB, Northland Logistics AB, Northland Logistics AS, Northland Mines OY and Northland Exploration Finland OY.
Image courtesy of Northland Resources.
Comments
Itabirite
A mine that never should have been started