New Millennium Iron Corp (NML), a Canadian iron ore exploration and mining company, which is 26.5 per cent owned by Tata Steel, opened a 2.8 per cent share buyback plan on Wednesday.
The Toronto Stock Exchange-listed NML in a filing said: “As approved by the TSX, the Corporation is authorised to purchase up to 50 lakh common shares, representing approximately 2.8 per cent of the currently issued and outstanding common shares of the Corporation”. At present, NML has 17.95 crore common shares outstanding.
For Tata Steel, which is the largest shareholder of NML, this move ahead of major landmarks in the explorer’s Canadian projects, would serve its interest better.
NML, a professionally managed company, for all practical purposes, is controlled by Tata Steel. The buyback exercise is to reduce the number of small investors. The NML projects are very important for the long-term raw material security Tata Steel Europe’s (Corus) operations.The open market share purchases on TSX would be conducted for a year. But, it could close any time before on fulfilling of the buyback target. At the end of the exercise, the acquired shares would be extinguished.
NML said the exercise would be advantageous for all remaining shareholders.
NML controls the Millennium Iron Range, located in the two Canadian provinces — Newfoundland and Labrador, and Quebec. The Range holds one of the world’s largest undeveloped magnetic iron ore deposits.
NML and Tata Steel are carrying out direct shipping ore (DSO) project for feeding the Indian conglomerate’s European steel making units. The project is owned and operated by an unlisted (80:20) joint venture between Tata Steel and NML.
NML is also pursuing three other iron ore exploration projects in north-eastern part North American semi-Artic region.