Tata and New Millennium Sign Iron Ore Agreement
The agreement calls for Tata Steel to participate in a feasibility study of the project and to contribute 64% of the study costs, estimated at $50 million. Upon successful completion of the study and Tata electing to develop one or both deposits, the companies would form a joint venture, with Tata holding 80% and New Millennium holding 20%, with an option to increase to 36%. Tata will arrange the required equity portion of the financing based on a maximum capital expenditure of up to $4.85 billion if both deposits are developed and up to $4.68 billion and $3.76 billion, respectively, if only the KéMag or LabMag deposits are developed.
The feasibility study will be NI 43- 101 compliant and is expected to be completed within 21 months of its initiation. Upon conclusion of the study, Tata Steel will have a maximum of four months to make an investment decision.