China's largest steelmaker buys into Canada's Labrador Trough
China's largest steelmaker, Hebei Iron and Steel Group, purchased a quarter ownership stake in an iron ore project in Canada's Labrador Trough, reports Platts this week.
The partnership with Alderon Iron Ore (TSX: ADV) and its investment in the Kami mine is the state-owned company's first in Canada. The Chinese firm, a.k.a Hegang, paid $182.2 million for its 25% share and is committed to a 60% offtake.
Alderon told the CBC the deal is a major boost for the project as it let it complete the majority of its detailed engineering and start preparing for a construction start at the end of this year.
The Kami project is expected to produce 8 million tonnes per year with a mine life of 30 years. Commercial mining will start in late 2015.
The Labrador Trough lies along the border between Quebec and Labrador in eastern Canada, reported to gold some of the world's largest undeveloped iron ore resources.
Hegang has a combined crude steel capacity of 50 million tonnes per year.