NML's Investment in Tata Steel Minerals Canada
NML has entered the iron ore market through participation in a direct shipping ore (“DSO”) project owned and operated by Tata Steel Minerals Canada (“TSMC”), under a shareholders’ agreement that includes subsidiaries of Tata Steel (77.68%) and the Quebec Government’s financing arm, Investissement Québec (18%), along with NML (4.32%).
The DSO Project features two fine ore product streams: A dry, crushed and screened ore with iron content (“Fe”) of approximately 60% that is produced seasonally, and a processed ore with approximately 64.5% Fe to be produced year round in a plant housed under a weather-proof structural dome.
Eventual production capacity is presently expected to total 6 million tonnes per year (“Mtpy”), comprised of 4.2 Mtpy of processed ore and 1.8 Mtpy of crushed and screened ore. There is potential to expand by developing additional resources, including from the Howse Deposit acquired by TSMC through related transactions in 2013 and 2015.
The logistics chain involves ore haulage over four railways as shown in the map below. The KéRail spur line connects the operating sites to the main lines, comprised of Tshiuetin Rail Transportation (“TSH”) and the Québec North Shore and Labrador Railway (“QNS&L”), and, at the southern end of the system, haulage is completed on chemin de fer Arnaud (“CFA”) to stockpiling and shiploading facilities on the Pointe-Noire side of the Port of Sept-Îles.
The CFA line and land side facilities at Pointe-Noire were previously owned by Cliffs Natural Resources as part of its Canadian iron ore operations and acquired by the Québec Government on March 8, 2016 through Investissement Québec and Société du Plan Nord. TSMC is working under an interim stockpiling and ship loading arrangement via Iron Ore Company of Canada’s terminal at Sept-Îles, but has also loaded DSO from a former Cliffs dock at Pointe-Noire.
Shipping of the crushed and screened DSO began in 2013 to Tata Steel Europe and to China, and seasonal deliveries to these markets continue. Construction of the processing facilities is essentially complete and trial production has been successfully achieved, but the plant is not yet in regular operation.
During the 2015 season, there were thirteen shipments totaling approximately 2.3 million tonnes. For the 2016 season through September 30, there were nine shipments totaling approximately 1.6 million tonnes.
Historical and background information on the DSO Project can be found in the February 2011 DSO Feasibility Study Technical Report.
DSO Feasibility Study Technical Report [2011/02/22]