Nippon Steel Corporation has reached a master agreement with Champion Iron Limited (CI) and Sojitz Corporation (Sojitz). Under the agreement, it will acquire an interest in the Kamistiatusset Iron Ore Project (Kami Project) and advance a feasibility study toward its development and operation. The project, owned by CI, is located in Newfoundland and Labrador, Canada. It is also under consideration for new development.
With all of the conditions precedent satisfied, Nippon Steel established a joint venture with Kami Iron Mine Partnership (the Partnership), together with CI and Sojitz. Through its wholly owned subsidiary, NS Canadian Resources, Inc., Nippon Steel acquired a 30% interest in the Partnership. It made an initial payment of CAD $42 million out of the total consideration of CAD $150 million. The remaining CAD $108 million of the consideration will be paid after an additional investment decision is made. The investment decision will be based on the feasibility study’s results.
The iron ore produced at the Kami Project is a high-grade, globally scarce resource. It is also suitable for the production of direct reduced iron (DR-grade). Through the acquisition of interests in the Kami Project and the partnership with CI and Sojitz, Nippon Steel aims to secure raw materials for direct reduced iron. It also aims to enhance its consolidated earnings base.
Courtesy of Nippon Steel.