Mumbai: Tata Steel on Monday said it has entered
into a joint venture agreement with Canadian mining firm New
Millennium Corp for development of an iron ore project in
North America, in which the Indian firm would invest 300
million Canadian dollars.
The world`s sixth largest steel producer, Tata Steel,
which signed the pact through one of its subsidiaries, aims to
achieve raw material security for its European operations
through assured supply of iron ore from the project.
"Tata Steel Global Minerals Holdings has entered into
joint venture agreement with New Millennium Capital Corp (NML)
and LabMag Limited Partnership (in which NML controls majority
stake) for development of the Direct Shipment Ore (DSO)
Project in Canada," the company said in a statement.
It said that the feasibility study for the DSO Project
was underway based upon which the company may make its
investment decision within 180 days from delivery of
"Tata Steel will arrange fund for 100 percent of the
project cost (of) up to 300 million Canadian dollars for 80
percent equity stake in the joint venture company with NML
holding a 20 percent stake," the statement added.
The DSO project contains an estimated 100 million tonnes
of direct shipping quality ore and NML expects an annual
production of four million tonnes of iron ore from it.
Tata Steel, which has 100 per cent offtake right from the
DSO project, expects that initial production would start from
the mines in the second quarter of 2011.
"Subject to completion of a positive feasibility study,
regulatory approvals and project financing, the DSO Project is
expected to start initial production in Q2 of 2011. Tata Steel
will have 100 per cent offtake rights for the production from
the project," the statement said.
Tata Steel Managing Director H M Nerurkar said, "Tata
Steel supports New Millennium`s efforts to advance the DSO
project to production. We are now awaiting the feasibility
study which will reflect a technically feasible and
financially viable project."
The steel maker is working to channelise 50 per cent of
its iron ore and coking coal -- key inputs for making steel--
to its European subsidiary Corus by 2015.
New Millennium President and CEO Robert Martin said,
"With this joint venture agreement we are closer to seeing the
DSO project enter production and this will help advance the
DSO project when final approval is made."