Kolkata | Jan 20, 2016: Tata Steel has suspended operations at its Canadian iron ore-mining and processing project this month. Though the steel major has not disclosed anything regarding the development, its junior partner in Canada, New Millennium Iron Corp (NML) announced that the project execution firm Tata Steel Minerals Canada (TSMC) “temporarily” scaled down winter operations including stabilisation activities of the all-season ore processing plant at its direct shipping ore (DSO) project.
“This action is in response to presently challenging conditions in the steel and iron ore markets and is expected to be reviewed on an ongoing basis. The number of TSMC employees affected will be based on operational needs, including services and maintenance”, Toronto Stock Exchange listed NML said in a filing. Tata Steel holds 94 per cent interest in TSMC.
According to market analysts, though this Canadian asset is being developed as a captive source for feeding its European steel making operations of Tata Steel, the current availability of iron ore at lower market prices in Europe is likely to have prompted the company to soft paddle the project for the time being.
Tata Steel’s Canadian DSO property is comprised of 25 hematite deposits with a resource potential of 122 million tonnes.
The project, located in the sub-arctic zone of eastern Canada, comprises mining, crushing, washing, screening and drying to produce 4.2 million per year of sinter fines and pellet feed. The processing facility is housed in a temperature-controlled structure to enable year-round operations. In the past couple of years, Tata Steel made a few trial shipments to Europe.
Meanwhile, NML, in which Tata Steel is the largest shareholder with 26 per cent holding, is facing a trying time. While Tata Steel is reviewing its involvement in development of other low grade iron ore mining assets in eastern Canada, an investor group collectively holding about 7 per cent in NML has moved for a change in management.
A meeting of the shareholders have been called on March 15 in Toronto for overhaul of the board. The rebel investor group has sought trimming of nine-member board size to seven and removal of existing directors, except three Tata Steel representatives.
(Source: http://www.thehindubusinessline.com/)