With the financial viability of its iron ore mining and pellet project in Canada confirmed by a study, Tata Steel is set to decide on an investment, says the project team.

Tata Steel is a strategic partner and the biggest stakeholder in the Toronto Stock Exchange-listed New Millennium Iron Corp (NML), which is pursuing the project. NML did not disclose the size of the proposed investment.

“The project financials have been evaluated with capital expenses, excluding certain infrastructure-related capital expenses in the mine, port and ferroduct (of over 600 km to carry the ore concentrate slurry to the pellet unit),” NML said. These would be owned by third parties.

In a statement, Robert Patzelt, President and CEO, NML, said: “We are very pleased with the results of this joint study….We believe the results present a compelling case for a profitable, successful, long-term iron ore operation.”

He added that the favourable geological and mining characteristics of the two deposits — Labmag and KéMag in eastern Canada’s sub-Arctic region — were “manifested in the study’s operating cost estimates”.

The study has suggested that the project has the potential to become one of the low-cost pellet producers of the world. It said the project would produce premium products whose estimated supply and demand will balance out over the next decade.

The project could produce 17 million tonnes a year two types of pellets and 6 million tonnes a year of pellet intermediates for export. NML had decided to submit “a single environmental impact statement covering all the components of the project”.