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CEDAR CITY, Utah (AP) -- After several setbacks, a Utah mining company says it will finally sell iron ore to a steel maker in China, helping boost this southern Utah town's fortunes.
CML Metals Corp. said it had an agreement to ship at least 600,000 metric tons of iron ore to a steel maker in China over the next two years.
The company said overseas shipments will start later this month and that it was confident it can find other customers for the iron ore.
The company is reopening a mine pit 20 miles west of Cedar City.
Executives of CML Metals Corp., formerly Palladon Iron Corp., have spent two years soliciting customers for the iron ore.
The company mined some iron ore -- 10,000 tons of it sat in rail cars for more than a year -- but the economy soured and forced a halt to operations in 2009.
With no sales and mounting debts, Vancouver, British Columbia-based Palladon Ventures Ltd., sought a partner with deep pockets.
New York-based Luxor Capital Partners LP, agreed to assume more than $40 million in debt for 78 percent of Palladon's stock.
The private equity firm also took title to the iron mine.
A name change to CML Metals Corp. made clear the company had "a new owner, a new start and a new direction," said Dale Gilbert, its chief executive.
"I'm not looking in the rear view mirror," Gilbert said. "We only have one goal: We are shipping ore and mining."
Gilbert said he plans to call back six miners laid off a year ago, in addition to hiring another six workers by early next year.
The company, meanwhile, plans to build a concentrator to boost the grade of the iron ore and capture more profits.
A concentrator grinds iron ore into a flour-like consistency with magnets separating the iron from the ore.
Gilbert said it could take 18 months to finance and build the plant.
CML plans to send iron ore by rail to a port in Richmond, Calif., for overseas shipping to China Kingdom International Minerals & Metals Co. Ltd.
Utah officials are thrilled over the economic activity and say the mine's revival has been a long time in coming.
Former Cedar City mayor Gerald Sherratt has said his only regret was that the iron ore was going overseas for processing instead of staying in Utah.
Every job CML Metals creates will support another 1.5 jobs in the region's economy, said Brennan Wood, director of the Cedar City/Iron County Office of Economic Development.
"It brings good income to the area," Wood said. "It provides for future growth."
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Information from: The Spectrum
(Copyright 2010 by The Associated Press. All Rights Reserved.)
