Tata Steel, New Millennium Enter Joint Venture Agreement
11/11/2009 - Tata Steel Global Minerals Holdings enters into Joint Venture Agreement with New Millennium Capital and LabMag Limited Partnership for development of the Direct Shipment Ore Project in Canada.
Tata Steel Global Minerals Holdings, a subsidiary of Tata Steel, has entered into Joint Venture Agreement with New Millennium Capital Corp. (NML) and LabMag Limited Partnership (through its General Partner) for development of the Direct Shipment Ore (DSO) Project in Canada.
Tata Steel could make its investment decision based on a feasibility study that is already underway for the DSO Project; that decision could come as soon as 180 days from delivery of feasibility to Tata Steel.
Under the agreement, a Joint Venture Company (JVC) would be formed upon closing of the transaction subsequent to a notice of Joint Venture Investment being delivered to NML by Tata Steel. If Tata Steel decides to develop, it will arrange to fund 100% of the project cost up to C$300 million for 80% equity stake in the joint venture company. NML would hold the remaining 20% stake.
Under the agreement, a Joint Venture Company (JVC) would be formed upon closing of the transaction subsequent to a notice of Joint Venture Investment being delivered to NML by Tata Steel. If Tata Steel decides to develop, it will arrange to fund 100% of the project cost up to C$300 million for 80% equity stake in the joint venture company. NML would hold the remaining 20% stake.
“Tata Steel supports New Millennium's efforts to advance the DSO Project to production,” said Tata Steel Managing Director H M Nerurkar. “We are now awaiting the Feasibility Study which will reflect a technically feasible and financially viable project.”
DSO Project contains, based on historical estimates that are not in compliance with NI 43-101, a resource of about 100 million tonnes of direct shipping quality ore. NML expects to produce 4 million tonne per annum of iron ore products from the DSO Project.
“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. We are working closely with Tata technical personnel, both in Canada and India, to complete all work that is expected to support a positive project decision,” said New Millennium President and CEO Robert Martin. “New Millennium's project complements Tata Steel’s strategy to increase self sufficiency in raw materials with supplies from captive sources for their wholly owned UK and European subsidiary.”
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% offtake rights for the production from the project.
Established in 1907 as Asia’s first integrated private sector steel company, Tata Steel Group (including Corus) is one of the world’s largest steel producers with an annual crude steel capacity of over 28 million tonnes. It is now the world’s second-most geographically diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries. The Tata Steel Group, with a turnover of $29 billion in FY ’09, has over 82,700 employees across five continents and is a Fortune 500 company. Tata Steel India is the first integrated steel plant in the world, outside Japan, to be awarded the Deming Application Prize 2008 for excellence in total quality management.
New Millennium holds a 100% interest in the KéMag Property (Quebec) and an 80% interest in the LabMag Property (Newfoundland and Labrador). The remaining 20% is owned by Naskapi Nation of Kawawachikamach. Both properties are located within the Millennium Iron Range, the centre of which is located approximately 230 km north of Labrador City, NL and 40 km northwest of Schefferville, QC. The company owns DSO claims in NewFoundland & Labrador and Quebec that contain, based on historical estimates that are not in compliance with NI 43-101, resource of about 100 million tonnes of direct shipping quality ore.
