Tata Steel's Canadian ore project to begin production this yr

The production will be ramped up to over 3 MT in 2014-15, Tata Steel said in a presentation posted on its website.

New Delhi: Tata Steel is planning to begin production from one of its iron ore projects in Canada by year-end, a move that will boost raw material supplies to its European operations.

As per the plan, production from Direct Shipping Ore (DSO) Project, in which Tata Steel holds 80 percent stake, is expected to begin during the October-December quarter. A target of 1 million tonnes (MT) of iron ore has been kept for the current fiscal.

The production will be ramped up to over 3 MT in 2014-15, Tata Steel said in a presentation posted on its website.

"Trial production (was) successful in 2012 with initial mining and dry processing of 63 percent iron grade ore. Plan for 1 MT of iron ore in FY'14, to be ramped up to over 3 MT in FY15," the company said, adding that it has obtained various permits, approvals and environmental clearances.

The DSO Project is run by Tata Steel Minerals Canada Ltd and contains 64.1 MT of proven and probable reserves having an average grade of 58.8 percent iron. It also has about 60 MT indicated, inferred and historical resources of various grades of iron.

Tata Steel has the commitment to invest about 300 million Canadian dollars on the DSO project.

In a recent update, New Millennium Iron Corporation --the 20 percent partner in DSO Project-- said that construction of the processing complex and ancillary facilities are expected to be completed during the October-December quarter of 2013 and then, first production will happen.

Iron ore from the project will be shipped to Tata Steel's European operations as pellets and sinter fines.
Tata Steel had already made a commitment to take 100 percent of the DSO project's iron ore products for the life of the mining operations.

Besides the DSO project, Tata Steel also has 26.3 percent stake in Canadian firm New Millennium Iron Corporation and 51 percent stake in Howse iron ore deposit of Labrador Iron Mines.

Tata Steel Minerals Canada Ltd is also involved in the development of New Millennium's LabMag-KeMag iron ore deposits, which together have proven and probable reserves of 5.6 billion tonnes of low grade iron ore.

According to New Millennium, the preliminary feasibility study report of the LabMag and KeMag deposits has been received and after preparation of the final report, it will be present before the Boards of the two companies.

The LabMag-KeMag deposits are one of the crucial links for the raw material security of Tata Steel's European operations, which does not have any captive mine of its own.