Tata Steel Minerals Canada (TSMC), a subsidiary of Tata Steel, bought half the interest in Labrador Iron MinesÂ’ (LIM) Howse deposit for Canadian dollars 30 million (Rs 160 crore).
In the areas of logistics and potential offtake arrangements, TSMC and LIM have entered into multi-part co-operation agreements as they operate adjacent iron ore projects spread over the Provinces of Newfoundland, Labrador and Quebec. The Labrador Trough is a 160-km wide iron-ore bed in the Labrador-Quebec region in Canada.
In the last 50 years, the trough delivered over two billion tonne of ore and attracted investments of $15 billion. It is estimated that the annual iron ore production of this region will increase from 35 mn t to 65 mn t by 2015.
The multi-part co-operation agreement includes development of a rail line that will pass through LIMÂ’s rail yard and connect TSMCÂ’s processing plant with the main rail line.
TSMC has the option to raise its stake in Howse deposit to 70 per cent by paying Rs 130 crore. Howse has an estimated iron ore reserve of 28 million tonne (mn t). TSMC will transfer its “Timmins 4” deposit, having resources of 1.7 mn t, to LIM for C$3 million (Rs 16 crore), which is recoverable from sales.
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