01/29/2015 11:29 EST | Updated 03/31/2015 05:59 EDT

IOC offering early retirement to mine workers

The Iron Ore Company of Canada is offering early retirement incentives to its workers in Labrador and Quebec as the company continues to wrestle with a downturn in the iron ore industry.

Ron Thomas is president of Local 5795 of the United Steelworkers, representing more than 1,400 unionized employees at the IOC mine in Labrador City.

He says the company is trying to reduce labour costs, and eligible workers began receiving letters of offer this week.

Thomas estimates that up to 145 workers throughout the company's operations in Labrador and Quebec are eligible for the package, and have until the end of next week to make a decision.

Workers with 30 or more years of service, or who are 62 years of age and older with at least 10 years of service, are eligible.

Those who accept the offer will receive a cash incentive of $25,000.

Thomas said he has mixed feelings about the offer.

"It's good for an individual that was planning on retiring. If they weren't planning on retiring, this incentive might not help them out at all," said Thomas.

Looking for other options

"It sounds like a lot of money, but by the time you take your taxes out of it and [if] you were planning on sticking around for another couple of years, you would make a lot more money than that."

Thomas hopes to get an opportunity to speak with company officials and discuss other options for cutting costs.

"I wouldn't want any of our members to do anything and then all of a sudden regret it later on down the road," he said.

IOC employs about 2,500 people at its operations in Labrador and Quebec.

The company is attempting to cope with a serious slump in iron ore prices, which have plummeted in recent months because of an oversupply on the market and a slowing of the Chinese economy.

It's the latest blow to Labrador West, which is still reeling following the closure of Wabush Mines in 2014, resulting in the loss of nearly 500 jobs.

When asked if he expected more cost-cutting measures by IOC, Thomas said it's quite possible.

"I can't forecast the future. I mean, you can just look across the lake and see what happened with Wabush Mines. My heart goes out to the members over there."