Corporate Information
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Corporate Information

82 Years in Labrador West

Labrador Iron Ore Royalty Corporation has been involved in Labrador West for 82 years. Under a Statutory Agreement with Newfoundland made in 1938, a predecessor company, Labrador Mining and Exploration Limited, was granted extensive exploration and mining rights in Labrador West. LM&E found the iron ore bodies that now constitute the mine operated by Iron Ore Company of Canada. LM&E received grants of leases and licences under the Statutory Agreement. It also received a grant of surface rights to establish the town site that became Labrador City. LM&E sublet the leases to IOC and IOC, with major steel companies as original shareholders, built the infrastructure, mine, railway and port. Under the sublease, LIORC receives a 7% gross overriding royalty on iron ore products produced and sold by IOC.


Labrador Iron Ore Royalty Corporation ("LIORC") is a Canadian corporation formed to give effect to the conversion of the Labrador Iron Ore Royalty Income Fund (the “Fund”) into a corporation under a plan of arrangement completed on July 1, 2010. LIORC is also the successor by amalgamation of a predecessor of LIORC with Labrador Mining Company Limited, formerly a wholly-owned subsidiary of the Fund, that occurred pursuant to the plan of arrangement. 

LIORC, directly and through its wholly-owned subsidiary Hollinger-Hanna Limited ("Hollinger-Hanna"), holds a 15.10% equity interest in Iron Ore Company of Canada ("IOC") and receives a 7% gross overriding royalty and a 10 cent per tonne commission on all iron ore products produced, sold and shipped by IOC.

Generally, LIORC pays cash dividends from its net income to the maximum extent possible, subject to the maintenance of appropriate levels of working capital. The common shareholders receive quarterly dividends on the common shares on the 25th day of the month following the end of each quarter.

The common shares are qualified investments under the Income Tax Act (Canada) for deferred plans, including registered retirement savings plans, registered retirement income funds and deferred profit sharing plans.

LIORC has a Board of eight directors, an Audit Committee, a Compensation Committee and a Nominating Committee. The Committees are composed of independent directors. Suske Capital Inc., pursuant to an administration agreement, acts as the administrator of LIORC.

About Iron Ore Company of Canada

The income of LIORC is entirely dependent on IOC, as the only assets of LIORC and its subsidiary are related to IOC and its operations. IOC is one of Canada's largest iron ore producers, operating a mine, concentrator and pellet plant at Labrador City, Newfoundland and Labrador, and is among the top five producers of seaborne iron ore pellets in the world. It has been producing and processing iron ore concentrate and pellets since 1954. IOC is strategically situated to serve the markets of the Great Lakes and the balance of the world from its year-round port facilities at Sept-Iles, Quebec.

IOC has ore reserves sufficient for approximately 24 years at the current rate of production, with additional resources of a greater magnitude. Currently it has the capacity to extract around 55 million tonnes of crude ore annually. The crude ore is processed into iron ore concentrate and then either sold or converted into different qualities of iron ore pellets to meet its customers needs. The iron ore concentrate and pellets are transported to IOC's port facilities at Sept-Iles, Quebec via its wholly-owned Quebec North Shore and Labrador Railway, Company Inc. a 418 kilometer rail line which links the mine and the port. From there, the products are shipped to markets throughout North America, Europe, the Middle East and the Asia–Pacific region.

IOC's 2019 sales totaled 17.2 million tonnes comprised of 9.6 million tonnes of iron ore pellets and 7.6 million tonnes of iron ore concentrate. Production in 2019 was 10.1 million tonnes of pellets and 7.9 million tonnes of concentrate for sale. IOC generated ore sales revenues (excluding third party ore sales) of $2,558 million in 2019 (2018 - $1,815 million). 

IOC Royalty

LIORC holds certain mining leases and mining licenses covering approximately 18,200 hectares of land near Labrador City. IOC has leased certain portions of these lands from which it currently mines iron ore. In return, IOC pays LIORC a 7% gross overriding royalty on all sales of iron ore products produced from these lands. A 20% tax on the royalty is payable to the Government of Newfoundland and Labrador. For the five years prior to 2018, the average royalty (net of the 20% tax) had been approximately $98.2 million per year and in 2019 the net royalty was $140.4 million (2018 – $103.0 million).

Because the royalty is "off-the-top", it is not dependent on the profitability of IOC. However, it is affected by changes in sales volumes, iron ore prices and, because iron ore prices are denominated in US dollars, the United States – Canadian dollar exchange rate.

IOC Equity

In addition to the royalty interest, LIORC, directly and through Hollinger-Hanna, owns a 15.10% equity interest in IOC. The other shareholders of IOC are Rio Tinto Limited with 58.72% and Mitsubishi Corporation with 26.18%. 

IOC Commissions

Hollinger-Hanna has the right to receive a payment of 10 cents per tonne on the products sold by IOC. Pursuant to an agreement, IOC is obligated to make the payment to Hollinger-Hanna so long as Hollinger-Hanna is in existence and solvent. In 2019, Hollinger-Hanna received a total of $1.7 million in commissions from IOC (2018 - $1.5 million).


LIORC is a taxable corporation under the Income Tax Act (Canada) and is subject to income tax on its net income.  The primary income of LIORC is royalties from IOC.  Expenses of LIORC include interest and administrative expenses. Dividends from IOC and Hollinger-Hanna are received by LIORC tax free.

All dividends paid by LIORC on its common shares are eligible dividends under the Act.