Thursday, December 19, 2024

Nippon Steel, Sojitz to take 49% stake in Champion Iron’s project in Canada

Reuters | December 18, 2024 | 

The Kami open-pit iron ore mine is located to the south of Labrador City and Wabush in the province of Newfoundland and Labrador. Credit: Stantec

Australia’s Champion Iron said on Thursday Japanese steelmaker Nippon Steel and trading house Sojitz will buy a 49% stake in the company’s Kami project in Canada for A$245 million ($152 million).


Nippon and Sojitz will hold a 30% and 19% stake respectively in the iron ore project in Canada’s northeast, and share development and construction costs based on their share in the mine, Champion said in a statement.

Kami, which Champion acquired in 2021, is also expected to receive as much as A$490 million ($305 million) through future contributions from Nippon and Sojitz, it added.

Champion’s CEO David Cataford said the deal underlined Kami’s potential.

“The financial support and collaboration provided by the partners mark an important milestone,” Cataford said in the statement.

Nippon, Japan’s largest and the world’s No. 4 steelmaker, is looking to optimize its supply chain from Kami, the company’s managing executive officer Ryuichi Nagai said.

Nippon Steel, which currently has a global production capacity of 65 million tons a year, is looking to raise that to 100 million tons a year in the long term.


It is currently trying to secure US approval for its acquisition of US Steel, a key part of that strategy, and has also been looking to buy stakes in coking coal and iron ore mines to ensure a stable supply of essential raw materials.

Nippon will invest C$150 million ($104 million) for its stake in Kami, while incurring about C$1.16 billion in development costs by the project’s completion, the company said in a statement. The costs will be subject to investor approval of the project’s development and the results of a future feasibility study, it added.

Kami is an advanced-stage open-pit iron ore mining project and offers an opportunity to secure the supply of direct reduction iron ore, Nippon Steel said.

Direct reduced iron, along with high-quality scrap, are necessary for the production of high-grade steel from large electric arc furnaces, which Nippon Steel aims to build to reduce carbon emissions.

“Iron ore to be produced at Kami will be used for hot briquetted iron (HBI), not as conventional iron ore for blast furnaces… so this is an investment for future production,” Shingo Nakamura, a senior executive at Nippon Steel, told reporters in Tokyo.

The project feasibility study is expected be completed in mid-2026, and construction would take about four years once the final investment decision is agreed, the statement said.

Nippon Steel estimated costs for all partners in the Kami project at nearly C$4 billion.

Kami is in Newfoundland and Labrador, a few kilometres from Champion’s operating Bloom Lake mine in Quebec.

Champion filed a pre-feasibility study for Kami in March 2024.

($1 = 1.4439 Canadian dollars)

(By Nichiket Sunil and Yuka Obayashi; Editing by Alan Barona and Kate Mayberry)

Canada clears Paladin’s $789 million Fission Uranium takeover

Reuters | December 18, 2024 |

Fission Uranium’s Patterson Lake South project in Saskatchewan. (Credit: Fission Uranium.)

Australia’s Paladin Energy has received the final green light it needed from Canadian authorities to buy Fission Uranium in a C$1.14 billion ($789.1 million) deal that cements is position as a major global producer, it said on Thursday.


Paladin got the clearance under the Investment Canada Act on Wednesday and said the deal under which it would acquire Fission’s advanced PLS project in Saskatchewan was expected to be completed by early January 2025.

The clearance comes as prices for the nuclear fuel surge on expectations of a demand spike as the energy transition unfolds. Shares fell 1.8% amid weakness in the mining sector.

The Canadian government in October stepped in to review the proposed tie-up on national security grounds, raising concerns it may be derailed by the county that has become increasingly sensitive towards strategic resource firms being taken over by overseas buyers.

Paladin has agreed to several conditions Canada has attached to the merger including not to use any China-sourced finance for funding PLS, or to sell PLS’s uranium directly or indirectly to any China customers beyond China General Nuclear Power Group, which has an existing offtake agreement, it said.

Canada in July cracked down on big mining takeovers, saying it would only approve foreign buyouts of large Canadian firms involved in critical minerals production “in the most exceptional of circumstances.”

($1 = 1.4447 Canadian dollars)

(By Rishav Chatterjee, Divya Rajagopal and Melanie Burton; Editing by Alan Barona and Stephen Coates)

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