RE: Partial article from Skillings yesterdaySorry for the delay zBankerz here is the whole article.
Canadian iron ore project attracts Indian steelmakers
Two Indian steel producers are gearing up to bid for a strategic stake in the Millennium Iron Ore Range in Canada.
Privately owned Essar Global Ltd and government-owned producer Rashtriya Ispat Nigam Ltd (Rinl) have both expressed interest in the iron ore reserves controlled by New Millennium Capital Corp, sources in India said.
Essar is seriously considering a bid, according to Indian media reports confirmed by a source close to the company.
Essar Global, which includes Essar Steel Holdings Ltd, might try to bid for the strategic stake through Algoma Steel Inc, which it acquired last year, although this has yet to be decided, the source said.
Other sources said that Essar Steel Holdings, which controls all the group's steel assets, may bid directly.
New Millennium's president and ceo Robert Martin confirmed that there had been unusual trading activity in his company's shares, which he said likely resulted from media reports about the Indian rumours. However, he declined to confirm or deny the speculation.
"We're talking with many potential strategic investors, but we haven't entered into any agreement with any of them," he said.
New Millennium has been in discussions with many companies in North America, Britain, Europe, Russia, the Middle East and Asia, but it might come down to one investor, Martin said.
"It looks to me more than likely that it will be a large company or a large steel company that needs that kind of tonnage."
An Essar Steel spokesman would confirm only that Essar is looking at various opportunities for growth in the steel sector. "We do not like to comment on every proposal that comes to us," he added.
New Millennium holds 80 percent of the LabMag Iron Ore project and 100 percent of the KeMag Iron Ore project in Quebec, which together form the Millennium Iron Ore Range.
The company is seeking investment and off-take commitments from potential strategic partners that will permit it to develop its iron ore projects in the Canadian provinces of Quebec, Newfoundland and Labrador.
The Millennium Iron Ore Range has proven iron ore reserves of 3.7 billion tonnes. It is expected to cost more than $4 billion to develop and exploit those reserves.
Essar is likely to face bidding competition from another Indian company. Rinl chairman and md P.K. Bishnoi has said publicly that his company is interested in bidding for an iron ore mine in Canada though he did not name a specific target.
The industry source said Rinl also has expressed interest in bidding for a strategic stake in the Millennium Iron Ore Range.
Rinl does not have captive iron ore mines in India, unlike fellow state-owned producer Steel Authority of India Ltd. Instead, Rinl buys iron ore from India's government-owned National Mineral Development Corp.