Expansion mode

Calcutta, July 5: Tata Steel plans to increase its exposure to Canada’s Millennium Iron Range for its European operations.

The world’s sixth largest steel producer is considering to have the KéMag project of New Millennium Capital Corp in its kitty. Toronto Stock Exchange-listed New Millennium owns the iron ore range.

Located in Canada’s Québec province, KéMag has 2.1 billion tonnes of proven and probable reserves of iron ore.

Tata Steel is the largest shareholder of New Millennium, with a 19.9 per cent stake.

Apart from KéMag, New Millennium holds an 80 per cent interest in the LabMag property in Canada’s Newfoundland and Labrador. Both the properties are within the Millennium Iron Range.

The Tatas had last year decided to participate in the direct shipping ore project of New Millennium, which is said to have a reserves of 100 million tonnes. Direct shipping ores are rich in iron content and require no processing.

Both the parties had also agreed to negotiate and finalise the Tatas’ participation in LabMag by June 30, 2009.

However, Tata Steel and New Millennium have extended the deadline to December 31, 2010, and the deal now includes KéMag.

The development comes at a time when initial estimates suggest that the direct ore project has proven and probable reserves of 52.2 million tonnes, less than the historical data of 100 million tonnes.

However, a feasibility study is expected to be completed by September.

The direct shipping ore is better than LabMag and KéMag as it has 58.9 per cent ferrous content.

LabMag contains 3.5 billion tonnes of reserves with 29.6 per cent ferrous content. KéMag iron ore has 31.2 per cent ferrous content.

New Millennium and Tata Steel have set up a joint steering committee with three members from each side.

The committee has been given the mandate to monitor the progress of the study and provide necessary direction for its timely completion.

New Millennium’s technical team will work closely with the engineers from Tata Steel’s Global Mineral Resources Group and research and development centre.

According to experts, both the LabMag and KéMag properties are located in difficult geographical terrain.

To ship the ore from the properties, these projects envisage the construction and operation of loading facilities and related infrastructure at Pointe-Noire, a port in Quebec.