BackNew Millennium Iron reviewing agreement with Tata Steel unit
The pact pertains to the feasibility study of the Taconite project the two companies are currently engaged in
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Mumbai: Canadian iron ore miner New Millennium Iron Corp. on Monday said it is reviewing its agreement with a Tata Steel Ltd subsidiary for an iron ore project in Canada.
“New Millennium Iron Corp. today announced a review process for the heads of agreement signed between New Millennium and Tata Steel Global Minerals Holdings Pte. Ltd which governs the feasibility study of the Taconite project the two companies are currently engaged in," the company said in a statement.
As part of the review, Tata Steel will consider current or potentially future participation in the development of the iron mines. “The parties intend to conclude a definitive agreement during the first quarter of 2016 subject to the respective board approvals of the parties," the statement said.
In March 2011, New Millennium Capital signed a binding heads of agreement with Tata Steel Global Minerals Holdings to develop the Taconite project. Under the agreement, Tata Steel was to participate in the development of a feasibility study of the project and contribute towards 64% of the estimated $50 million costs related to the study.
Both companies were also to enter a binding joint venture agreement on the successful completion of the study. Under the agreement, Tata Steel was expected to arrange the required equity portion of the financing based on a maximum capital expenditure of up to Canadian $4.85 billion if the entire project was to be developed.
With the global fall in commodity prices, New Millennium in September this year announced a new development approach for these mines, which included a study evaluating the pre-feasibility level development scenarios for the mines at various production rates, using the existing rail infrastructure for evacuation.
On Monday, Tata Steel shares closed 5.82% up at ₹ 224.50 on the BSE.
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