by Sohrab Darabshaw on NOVEMBER 15, 2016
Tata Steel’s Canadian subsidiary recently signed definitive agreements with Resources Quebec and Investment Quebec, the investing arms of the provincial government for investment of $92.46 million (125 million Canadian dollars) in equity and $36.98 (50 million Canadian) dollars in debt, giving an 18% stake in Tata’s Canadian susbsidiary to Resources Quebec.
Tata Steel Minerals Canada (TSMC) is a joint venture between Tata Steel and Canada’s New Millennium Iron Corp. It will start mining iron or in Quebec, Newfoundland, and Labrador Peninsula, and set up multiple processing facilities, including a beneficiation plant.
After the transaction is completed, Tata Steel and New Millennium’s iron or stakes will be reduced to 77.68% and 4.32%, respectively.
The deal aims to advance development of the Direct Shipping Ore (DSO) property, which straddles the border between Quebec and Labrador, with mineral deposits on both provinces.
Tata Steel Group has invested over $1.35 billion (1 billion Canadian) in the direct shipping ore project to date.
Tata Steel Executive Director, Finance and Corporate, Koushik Chatterjee was quotedsaying the investment signaled the Government of Quebec’s cooperation in supporting sustainable development in line with the objectives of its Plan Nord Initiative.
After inking the deal, Tata is positive it will lead to increased production, improving cost competitiveness and the development of the mineral deposits in Quebec.
Tata said the project — which involves mining, crushing, washing and drying the run-of-mine ore near Schefferville, Québec, — will produce 4.2 million meric tons of sinter fines and pellet feed annually.
The finished product will be shipped to Tata Steel Europe’s steelmaking facilities.