Tata Steel secures extension of exclusivity agreement from New Millennium
05 January 2011
Tata Steel Global Minerals Holdings Pte Limited, a wholly-owned subsidiary of Tata Steel has secured the extension of an exclusivity agreement with New Millennium Capital Corporation (NMC) to develop the Canadian miner's LabMag and KeMag iron ore projects in Quebec.
Tata Steel has agreed to pay C$600,000 ($604,500) to extend the exclusivity agreement from 31 December 2010 to 28 February 2011 for its option to have the first right to develop the KeMag and LabMag iron ore projects.
Tata Steel owns 27.4 per cent of Calgary, Alberta-based NMC and paid $300 million for a 80 per cent stake in the joint venture with NMC for its direct shipment ore (DSO) mining project located in the province of Newfoundland, Labrador and the province of Quebec, which holds one of the world's largest undeveloped magnetic iron ore deposits.
While forming the joint venture in October 2010, (See: Tata Steel in JV with New Millennium for Canada mining project) Tata Steel had received the exclusive right to negotiate and settle a deal for NMC's LabMag and KeMag project by 31 December 2010.
LabMag contains 3.5 billion tonnes of proven and probable reserves, while KéMag holds 2.1 billion tonnes of proven and probable reserves.
Tata Steel, the world's seventh-largest steel producer, is consolidating its requirement of raw materials although its own raw material requirements for its 5-million tpa domestic capacity has been secured locally, but its international unit, Corus is dependent on imported ore and coal to fuel its 18 million tpa steel making capacity.