What we own

Anglo Pacific owns a 4.25% shareholding in Labrador Iron Ore Royalty Corp. (LIORC), which is listed on the Toronto stock exchange (TSX:LIF), at an investment cost of US$50 million (C$65.5 million, ~£38 million)

LIORC is structured as a passive flow-through vehicle for a 7% Gross Revenue Royalty (GRR), a C$0.10 per tonne commission, and a 15.1% equity position in the Iron Ore Company of Canada (IOC) with a policy of paying cash quarterly dividends to the maximum extent possible

IOC is operated by Rio Tinto, with mining and processing operations located in the area of Labrador City, Canada. IOC is one of Canada’s largest iron ore producers, and is among the top five global producers of seaborne iron ore pellets.

The transaction provides exposure to the premium end 65% iron ore concentrate and high-margin pellet markets at a favourable point in the cycle, and is in-line with the Company’s strategy to acquire and complement its existing portfolio of income producing royalty related assets

Performance

A special dividend of C$0.30 was declared for Q2 2018 which, in addition to the C$0.25 ordinary dividend, has resulted in total contribution for Q3 2018 of £0.9m. The Group believes this reflects the higher premiums being generated from the underlying high-quality iron ore pellets and confirms the view that higher quality products should command a greater value going forward.

Community Support, Health & Safety, and Environmental Responsibility

  • Community Contribution
    • IOC actively supports a wide range of activities that benefit the communities in which IOC operates
    • The 2017 Community Investment Program resulted in more than 50 community partnerships in both Labrador West and Sept-Îles
    • In 2017, IOC employed 2,318 which provided C$382 million in wages and salaries (including benefits)
    • IOC is represented on community boards (including the Housing & Homeless Coalition, Habitat for Humanity, Chamber of Commerce, Labrador West Gateway, Sept-Îles regional hospital foundation)

 

  • Engagement with Indigenous Group
    • IOC actively engages with the five identified Aboriginal groups in Labrador and Quebec within the IOC spheres of operations
    • IOC initiatives include an Aboriginal centre in Labrador West, the sale of Tshiuetin Rail Transportation Inc. for a nominal sum of C$1 to result in the first Aboriginal ownership of a railway in Canada, and free of charge transportation along the QNSL&L railway to Schefferville
    • IOC actively supports many other Aboriginal programs

 

  • Health & Safety
    • IOC’s all injury frequency rate (AIFR) for 2017 exceeded target (0.91 vs 0.67)
    • The goal of achieving Zero Harm is firmly embedded at IOC
    • Integrated health, environment and quality management systems have been implemented, as have education and awareness initiatives, team-based talks, communication campaigns, and encouragement of employee-driven innovation and improvements

 

  • Environmental Responsibility
    • IOC has taken actions to reduce its environmental impact, including an air quality improvement program for Labrador City, a land rehabilitation project, a soil and groundwater clean up from historical contamination, and greenhouse gas quantification by product
    • As part of IOC’s Progressive Rehabilitation and Revegetation Campaign, 49 hectares were rehabilitated in 2017
    • Quarry production facilities, located approximately 18 km east from Labrador City, underwent approximately 17 hectares of successful revegetation of which 8 hectares were hydroseeded and 10 hectares broadcast seeded