Sojitz, Nippon Steel to Invest in Champion Iron’s Canada Mining Project
Japanese steelmaker Nippon Steel and trading house Sojitz will buy a 49% stake in the company’s Kami project in Canada for C$245 million ($170.41 million), as per reports.
Sojitz Corporation has reached an agreement with Champion Iron Limited and Nippon Steel Corporation to participate in the Kamistiatusset Project, a new iron ore mining project under development in Newfoundland and Labrador, Canada.
The Kami Project aims to produce direct reduction (DR) quality iron ore, which is essential for steel production and has the potential to significantly reduce CO2 emissions when processed using electric arc furnaces, as per the reports by Sojitz.
Nippon Steel and Sojitz will hold stakes of 30% and 19%, respectively, in the iron ore project in northeastern Canada and will contribute to development and construction costs proportionate to their ownership shares, Champion stated.
The steel industry is focused on achieving carbon neutrality by 2050, with efforts to reduce CO2 emissions by shifting from traditional blast furnaces to electric arc furnaces that recycle iron scrap.
However, producing high-quality steel with electric arc furnaces requires high-grade iron ore, which the Kami Project is expected to provide. The project’s iron ore will meet the necessary standards for DR quality, with high iron content and low impurities, which are key to producing reduced iron.
The Kami Project’s development is also seen as a step toward enabling the future transition to hydrogen-based steel production in the 2040s.
Champion, which acquired the Bloom Lake Mine in Quebec in 2016, operates it through its subsidiary, Quebec Iron Ore. Sojitz has secured offtake rights for its share of the iron ore produced from the Kami Project and will assist with sales to selected consumers.
“The financial support and collaboration provided by the Partners mark an important milestone,” Champion’s CEO David Cataford said in the statement.
Nippon Steel aims to increase its global production capacity from the current 65 million tons per year to 100 million tons a year in the long term.
Sojitz aims to build a stable supply chain in the metals and mineral resources sectors, focusing on distinctive resources that contribute to a carbon-neutral society. The company continues its sustainability initiatives as part of its long-term vision for 2050, working to reduce CO2 emissions and support green transformation efforts.
In the near term, the partnership plans to progress with the Environmental Impact Statement recently initiated, as mandated by the Government of Newfoundland and Labrador.
Kami is an advanced-stage open-pit iron ore mining project and offers an opportunity to secure the supply of direct reduction iron ore, Nippon Steel said.
Direct reduced iron and high-quality scrap are essential for producing high-grade steel in large electric arc furnaces, which Nippon Steel plans to develop to lower carbon emissions.
Nippon Steel estimated costs for all partners in the Kami project at nearly C$4 billion.