New Millennium Capital Corp. of Canada and Tata Steel Ltd. of India have decided to develop the large scale iron ore reserves in Labrador and Quebec. This is the latest bid by a global steel making company on Canada’s resources to secure raw material for manufacturing steel.
With the prices of commodities rising beyond expectations steelmakers are now in a race to amass their own mineral development assets in a bid to keep manufacturing prices down. With demand for iron ore and coal going up thanks to emerging economies of China and India many steel makers have started investing in mines to safeguard against supply shortages as well.
The Tata Group which owns the luxury carmaker Jaguar Land rover and Tata Steel has been investing proactively in iron ore reserves across the globe. The Montreal based New Millennium Capital Corp. signed a joint development deal for the Tasconite Project that it owns with Tata Steel on Monday. The project is situated 30 km north west of Schefferville and lies partly in Labrador and partly in Quebec.
The $50 million jointly financed feasibility study has been initiated and should take about 18 months to conduct. If feasible the JV partners would construct the mine and the grinding and concentration plants nearby. Tata Steel will arrange equity financing for the mine development to the tune of $4.85 billion and it will also handle the debt financing.