Tata Steel to invest $175 million in Canadian mine

The Dollar Business Bureau

Amid the controversy surrounding the replacement of Tata Sons Chairman Cyrus Mistry, Tata Steel Minerals Canada in cooperation with its parent companies has decided to invest 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.

Tata Steel will set up mining operations across several deposits in the Quebec-Newfoundland and Labrador-peninsula and several processing facilities in Eastern Canada.

The C$172 million project will help develop infrastructure facilities including rail, roads, telecommunications and Port, which, in turn, will have a positive impact on the socio-economic landscape of Quebec, Newfoundland and Labrador.

The series of investments will result in an 18% equity stake for Resources Quebec in Tata Steel Minerals Canada. The shareholdings of Tata Steel and New Millennium Iron will be adjusted to 77.68% and 4.32% respectively.

Expressing his views on Tata Steel’s new development, Group’s Executive Director (Finance and Corporate) Koushik Chatterjee 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.”

“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,” he said.

Tata Steel Minerals Canada is a joint venture formed by Tata Steel and New Millennium Iron Corp in October 2010. The Indian steel major owns 94% stake in this joint venture.