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Tata Steel announces equity partnership for its Canadian Iron Ore Mines

Mumbai/Jamshedpur, October 27: Tata Steel Minerals Canada together with its parent companies signed Definitive Agreements for concluding investments of C$ 125 million as Equity and C$ 50 million as Debt with Government of Quebec’s investment entities, Resources Quebec (RQ) and Investment Quebec (IQ) respectively, totaling C$ 175 million.

Tata Steel has invested in Eastern Canada to set up mining operations across several deposits straddled across the Quebec-Newfoundland and Labrador- peninsula and multiple processing facilities including a state-of-the-art beneficiation plant.

The project has consequently enabled the development of infrastructure facilities including rail, roads, telecommunications and Port that has had significant positive impact in the socio economic landscape in Quebec and Newfoundland and Labrador.

The investment will result in an 18% equity stake for Resources Quebec in Tata Steel Minerals Canada in line with the carrying value of the investment in Canadian iron ore assets for Tata Steel. Consequently, the shareholdings of Tata Steel and New Millennium Iron will be adjusted to 77.68% and 4.32% respectively.

Koushik Chatterjee, Group Executive Director (Finance and Corporate), Tata Steel Limited said “Today we have begun a new chapter in the future of iron ore mining in Eastern Canada. We are pleased to welcome Government of Quebec as a strategic equity partner to Tata Steel in this venture, particularly in these uncertain and challenging times for the global iron ore industry.

This investment signals Government of Quebec’s co-operation in supporting sustainable development in line with the objectives of its Plan Nord Initiative. We are confident that the Quebec Government’s investment will facilitate the implementation of Tata Steel Mineral Canada’s future plans of ramping up production, improving cost competitiveness and the development of the mineral deposits in Quebec.”

Tata Steel’s India operations have recently achieved a major milestone of production of 1 million tons of Hot Metal in the new greenfield steel plant in Kalinganagar, Odisha in less than six months of formal commissioning of the facilities. Similar ramp up in production has been achieved in the steel making facilities in Kalinganagar and in the last month, the combined monthly sales of Tata Steel Jamshedpur and Kalinganagar crossed 1 million tons for the first time.
In response to the recent media reports, Tata Steel would also like to clarify that it continues to pursue its European consolidation strategy and the talks with thyssenkrupp AG (as announced on July 8, 2016) for a potential joint venture of its European steel business are currently ongoing and progressing. However, there can be no guarantee that these talks will result in a definitive agreement between the parties.

Tata Steel UK is also deeply engaged with all relevant stakeholders in the UK to find a structural solution and a way forward with regard to the affordability of the legacy pension scheme liabilities.

A successful outcome of the above engagement would significantly help in developing the foundation for a sustainable future for the UK business.

Tata Steel would also like to reaffirm that it is currently pursuing a separate process for the potential sale of the South Yorkshire-based Specialty Steels business in the UK.

Any further announcement on the matter will be made at an appropriate time.

In the meanwhile, the management team and the employees of the company continue to work on improving the underlying performance of the European business amidst challenging business conditions.

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