Study manager seeks more time for capital cost estimates

Feasibility study for the Tata Steel-backed iron ore projects in North-Eastern Canada is running behind schedule. Tata Steel and its strategic partner New Millennium Iron Corporation (NML), have granted additional time to the “study manager” for the completion of the exercise.

Capital cost estimates

NML said the study manager sought more time for the finalisation of the capital cost estimates and review of certain technical aspects. The exercise was to be over by October, the MD of Tata Steel, HM Nerurkar, had told Business Line earlier. The two Canadian projects — LabMag and Kemag — are crucial for Tata Steel Europe’s raw material security. At present, Tata Steel’s European operations do not enjoy benefit of a captive iron ore source.

Tata Steel Minerals Canada Ltd (TSMC) is developing the Canadian taconite (low-grade iron ore) projects. It is a 80:20 joint venture between Tata Steel and Canada-listed NML. According to sources, the study report could be ready in another couple of months.

TSMC, which is developing iron ore deposits in Quebec and Newfoundland & Labrador in Canada, has undertaken the feasibility study in collaboration with NML. The LabMag and Kemag iron ore deposits form a part of the 150-km-long Millennium Iron Range in northern Canada.

The logistics of bringing the beneficiated ore through semi-arctic zone to the designated eastern Canadian port is an issue of fiscal and infrastructural importance.

After the feasibility report, TSMC would address this logistics issue — whether to evacuate through rail or road .

The proven and probable estimated reserve of LabMag and Kemag put together is 5.6 billion tonnes. The northern end of the Millennium Range also hosts another taconite deposit — Lac Ritchies. Tata Steel, the largest (26.5 per cent) shareholder of NML, has not yet drawn up a specific plan for off-take of the ore.

However, TSMC is pursuing another iron ore project, aimed to feed Tata Steel in Canada. Called direct shipping ore (DSO) project, it involves mining, crushing, washing, screening and shipping the sinter fines and pellet fines to Tata Steel’s European steel making facilities.

(This article was published on January 4, 2013)
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