Tata Steel on Wednesday said the Quebec provincial government of Canada has announced a financial contribution of 175 million Canadian dollars to Tata Steel Minerals Canada (TSMC) to support a direct shipping iron ore project (DSO project) at Schefferville.
The Tata Steel Group has invested an amount in excess of C$1 billion in the DSO project.
"...the award of a government financial contribution of C$175 million to Tata Steel Minerals Canada to support the achievement at Schefferville of a direct shipping iron ore project (DSO project) in which Tata Steel Group has invested an amount in excess of C$1 billion," the steel producer said in a filing to Bombay Stock Exchange.
According to the statement, the financial contribution includes equity stake of C$125 million through the Capital Mining Hydrocarbons Fund and a loan of C$50 million from Investissement Quebec, acting as an agent of the government.
"Tata Steel has demonstrated its willingness to do business in Quebec by committing up to C$1 billion in the development of the DSO project, which stands out for the innovative process it uses. Our government is proud to support such initiatives, which will have positive spinoffs for Quebec and could eventually lead to new mining projects," said Quebec government's Minister for Mines, Luc Blanchette.
Steel producer's Group Executive Director Koushik Chatterjee said this is a challenging time in the global iron ore industry due to soft underlying steel demand, over capacity in the steel industry and volatile foreign exchange fluctuations.
"We will continue to work closely with the Government of Quebec and other stakeholders to do all that we can do to improve the competitiveness of the Canadian iron ore business and make it more sustainable for the future," he said.
Founded in 2010, TSMC is an indirect subsidiary of Tata Steel Ltd, with equity participation from New Millennium Iron Corp. (NML), a TSX listed company headquartered in Montreal, to develop the DSO deposits located in Quebec and Newfoundland and Labrador.
TSMC forecasts annual production of over 6 million tonnes of iron ore.
Quebec government's Deputy Premier and Minister responsible for Small and Medium Enterprises, Regulatory Streamlining and Regional Economic Development, Lise Theriault, said this project would have significant benefits for our economy, creating up to 550 quality jobs in Quebec.
--IANS
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