Two Japanese giants have committed to investing up to 500 million in the iron mine project near Fermont, a huge step closer to a project with major potential economic benefits.
Published at 5:00 a.m.
Champion Iron, which notably operates the Bloom Lake mine on the North Shore, announced Wednesday this crucial advance in the Kamistiatusset (Kami) project, an open-pit mine project in southwestern Newfoundland and -Labrador, near the eastern border of Quebec.
The company has signed an agreement with two Japanese mining industry leaders, Nippon Steel and Sojitz, who will initially contribute $245 million, for a 49% stake in the project.
The new mine would have a lifespan of 25 years and its construction cost was estimated at nearly $4 billion in a pre-feasibility study. It would produce 9 million wet metric tons of direct reduction grade iron ore annually, a highly purified concentrate whose operation emits lower quantities of CO2.
A second investment from Nippon Steel and Sojitz could follow, if construction of the mine goes ahead, bringing the Japanese giants’ contribution to $490 million even before Champion is required to finance the project.
According to David Cataford, CEO of Champion, the project is consistent with the decision of the governments of Quebec and Canada to classify iron ore as a critical mineral. Quebec considers these minerals essential for the manufacturing of several renewable energy production and storage technologies that reduce greenhouse gas emissions.
“New money” in the region
The interest of Japanese partners in the Kami project is not surprising in the eyes of Pierre Gagnon, president and CEO of the Port of Sept-Îles, of which Champion is one of the main partners. “The properties of the ore that we have in the Canadian Shield are really sought after, because they have very few contaminants, and we can enrich them to the highest level to allow the most possible efficiency in the production of steel” , he says.
The investment by Nippon Steel and Sojitz in the project constitutes “a beautiful commercial bridge” between Quebec and Japan, according to Pierre Gagnon. “On the port side, we have the infrastructure to meet demand, and we are very happy for Champion for this association with truly strategic allies,” he adds.
Pierre Gagnon affirms that Champion is in a good position to exploit the Kami mining properties, which are only about twenty kilometers from the Bloom Lake facilities.
Director of economic development for Port-Cartier, Bernard Gauthier also welcomed the investment. “It’s new money coming into our economy,” he commented. This is good news for the region and, among others, for Champion. »
David Cataford, CEO of Champion, celebrated the news in a statement, saying the project could “provide access to renewable energy for decades in the region” if it goes ahead. “Kami could drive significant economic growth in Labrador West and represents an opportunity to contribute to the decarbonization of the global steel industry,” he added.
Two-step investment
Champion will have to go through a few steps before securing a second investment from Nippon Steel and Sojitz. The partners will first need to carry out a definitive feasibility assessment of the project, which is expected to be finalized by mid-2026.
The project can then move forward towards a final investment decision. The project construction period is estimated at 48 months following the making of a final investment decision.
Where applicable, Champion and its Japanese partners will share the development and construction costs of Kami in proportion to their respective contributions. Following the closing of the transaction, Champion will hold a 51% interest in the project, while Nippon and Sojitz will hold respective interests of 30% and 19%.
Champion will remain responsible for the operation of the project, including ensuring the potential development and future operations of the project.
