 "Tata Steel buys iron deposits in Canada")
As per this strategic deal, Labrador Iron will transfer 51% stake in its Howse deposit to Tata Steel Minerals Canada (TMSC). The Howse deposit is estimated to have 28 million tonnes of iron ore resources. In turn, Tata will transfer its 'Timmins 4' deposit having resource of 1.7 million tons to Labrador for 3 million Canadian Dollars (Rs 16.3 crore). This payment is recoverable from sales.
Tata can also increase its ownership of Howse deposit to 70% for 25 million Canadian Dollars (Rs 136 crore). The strategic relationship will include potential off-take arrangements and further exploration of Howse deposit. They will also co-operate to develop a rail line that will pass through Labrador Iron's rail yard facilities and connect TSMC’s processing plant with the main rail line.
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“The proposed arrangement with Labrador Iron is expected to enhance the raw material security for the group and streamline the logistics of the DSO project, which is expected to come on stream in 2013,” said H M Nerurkar, managing director of Tata Steel.
Tata Steel holds 80% stake in DSO iron ore project, which has 125 million tonnes of resources spread over 25 deposits. The mine commenced production in September last year, and the processing plant is under construction.
This Canadian iron ore project came into Tata's fold, after they acquired stale in New Millennium Iron Corporation, in 2008.
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