Calcutta, Nov. 9: Tata Steel has signed an agreement with New Millennium Capital Corp of Canada to develop an iron ore mining project at an estimated investment of up to 300 million Canadian dollars, or around Rs 1,314 crore.

The company hopes to start production from the second quarter of 2011 for supply to Corus’s European plants.

In the project, New Millennium sees estimated reserves of 100 million tonnes of ore that can be shipped directly, and the firm expects an annual output of 4 million tonnes.

Tata Steel — which will arrange funds — will own 80 per cent in the joint venture for the project.

The Indian steel maker said it would take a decision on investment within 180 days of the delivery of a feasibility report.

Tata Steel holds the rights on the entire output from the project.

H.M. Nerurkar, managing director of the company, said, “Tata Steel supports New Millennium’s efforts to advance the project to production. We are now awaiting the feasibility study, which will reflect a technically feasible and financially viable project.”

Tata Steel owns a 19.9 per cent stake in New Millennium, for which it has paid Rs 106 crore.

Vietnam project

Tata Steel has formally accepted an offer from Vietnam’s Ha Tinh province for land to build a steel plant. The local authorities have offered 725 hectares of sea-facing land for a steel plant, 150 hectares for a township and 37 hectares for ancillaries.

The company’s 4.5-million-tonne project was stuck because of land dispute.

However, the Tatas are yet to take possession of the land.

The company plans to invest $5 billion in Vietnam to build the steel plant and develop an iron ore mine.