Tata Steel partners NML; to invest 300 mn Canadian dollar
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Last Updated: Tuesday, November 10, 2009, 00:06
  
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 feasibility report.

"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."

Bureau Report


First Published: Tuesday, November 10, 2009, 00:06


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