* Labrador incurs net loss, shares fall 9.5 pct
* Iron ore prices have tumbled 30 pct this year
* Weak prices credit negative for Fortescue, Atlas - Moody's
By Manolo Serapio Jr and James Regan
SINGAPORE/SYDNEY, July 3 Canadian iron ore miner
Labrador Iron Mines Holdings (LIM) said it has halted
mining operations this year, as falling prices on the back of a
surge in global supply hit smaller producers.
LIM, which operates in the Labrador Trough in Quebec, posted
a loss of C$105.2 million ($98.6 million) for the year to March
and said it would almost certainly have posted further operating
losses this year given current low prices.
Iron ore prices have fallen about 30 percent so far in 2014
as a flood of new supply to main market China, fueled by an
expansion binge among global miners, has overwhelmed demand.
Smaller miners are not able to achieve the economies of
scale that have driven down production costs at companies such
as Brazil's Vale SA, and BHP Billiton and Rio
Tinto in Australia.
"LIM is currently not planning for any mining or processing
activity in 2014," company president and chief operating officer
Rod Cooper said in a statement on Wednesday. Subject to
completion of financing, LIM plans to begin production from its
bigger Houston iron ore mine in April 2015, said Cooper.
Australia's Cairn Hill iron ore mine was shut late last
month by its owner IMX Resources after falling prices
crippled the 1.7-million-tonnes-per-year operation. The mine is
49 percent-owned by China's Taifeng Yuanchuang International
Development, which also holds a direct stake in IMX.
Ratings agency Moody's Investors Service warned on Wednesday
that falling iron prices would have the biggest impact on miners
that rely solely on iron ore for revenue, as well as some mining
Morgan Stanley estimates the average cash cost of iron ore
producers in Canada, equivalent to the 62-percent grade
benchmark, is at $80 per tonne this year compared with just $38
for Rio Tinto.
Iron ore stood at $94.70 a tonne .IO62-CNI=SI on
Wednesday. A recent Reuters poll of analysts pointed to limited
near-term upside, with forecasts the price could fall as low as
$80 next year.
Moody's said lower prices were credit negative for
single-commodity miners Fortescue Metals Group and
Atlas Iron Ltd.
Each $8-per-tonne reduction in iron ore prices at current
production, would cut Fortescue's annual revenue by about $1.2
billion, or roughly 11 percent of 2013 revenue, it said. Atlas'
revenue would fall by about $90 million, or 9 percent of last
($1 = 1.0669 Canadian Dollars)
(Editing by Richard Pullin)