Judge puts Mary River Mine’s future in hands of neutral decision-makers

Final say over the future of the Mary River iron mine is in the hands of two neutral, court-appointed parties, an Ontario judge has ordered.

Justice Jana Steele’s decision on Oct. 14 comes as Baffinland Iron Mines Corp. enters a sale and investment solicitation process, an effort to keep the mine operational after the company announced in May that it could not repay roughly $1.2 billion to various lenders.

The mine contributes roughly 25 per cent of Nunavut’s gross domestic product.

“At this time, the alternative to a transaction is a liquidation, which would have a devastating impact … including the loss of over 1,200 jobs,” said Steele, a superior court judge.

Export Development Canada and the company’s other lenders proposed that a court appointed monitor and neutral chief restructuring officer should have final say over any potential deal. Baffinland wanted a committee of shareholder representatives in that role.

“While the distinction may appear academic at first blush, the ultimate decision-maker in the [sale process] will have the authority to make critical decisions, including waiving bidding criteria, selecting the successful bid, and finalizing any resulting transaction,” Steele said in her decision, before concluding an independent decision-maker is the “best path forward” for the company.

While the process could end in the sale of Baffinland’s assets or the mine itself, the aim is to solicit bids for a “broad range of transaction alternatives.”

Baffinland will work with all parties to support a “successful outcome,” said company spokesperson Peter Akman Friday in an email.

“The court’s decision provides a clear path forward,” he said.

Work to solicit bids is already underway, Steele noted in her decision. “Select” potentially interested parties have non-disclosure agreements and have arranged site visits.

A sale process, she said, “needs to get going — and soon.”