Tata steel pursue Canada ore deal

Calcutta, Jan. 19:

Tata Steel has paid Canadian $600,000 to New Millennium Capital Corp to extend a deadline to conclude an exclusive deal to invest in two multi-billion-dollar iron-ore mining projects in the Quebec-Labrador region of Canada.
New Millennium, a Toronto Stock Exchange-listed mining company, owns two of the world’s largest underdeveloped magnetic iron-ore deposits called Labmag and Kemag. Tata Steel owns 27.2 per cent in the listed parent firm and another 80 per cent in a small project other than Labmag and Kemag.
The Indian firm has been holding exclusive talks with New Millennium to develop these two low-grade ore deposits but could not conclude the deal.
Koushik Chatterjee, chief financial officer of the Tata Steel group, said the company was evaluating the proposal and would come up with more details by the end of February.
It is likely that the Tata Steel board will approve a binding agreement with New Millennium within six weeks.
Labmag and Kemag contain 3.5 billion tonnes and 2.5 billion tonnes of proven and probable reserves with 29.3 per cent and 31.3 per cent ferrous content, respectively.
According to Chatterjee, Tata Steel wants Canada’s New Millennium and Australia’s Riversdale to start production and commence supply to the firm’s European business, formerly called Corus. The two projects are likely to involve multi-billion-dollar investments.
Tata Steel meets 50 per cent of its coking coal requirement and the entire iron-ore need for its domestic business from captive sources.
However, for operations in the UK and the Netherlands, the company has to buy the key raw materials.
Riversdale will start supplying coal from Mozambique later this year, while New Millennium will commence ore supply within two years. The Tatas have an 80 per cent share and 100 per cent offtake right in a DSO (direct shipping ore) project of New Millennium having deposits of 64.1 million tonnes with 58.8 per cent ferrous content.
Meanwhile, Tata Steel’s FPO, which opened today, saw foreign investors such as Blackstone, Fidelity and GIC of Singapore bidding eight times more than the amount allocated under the anchor investor quota. Sourced:The Telegraph