Champion Iron has announced a partnership with Nippon Steel and Sojitz to advance the feasibility assessment and potential development of the Kami project in Canada.
The Kami project is a DR grade quality iron ore project south-east of the Bloom Lake mine.
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The partnership will involve an initial contribution of $245m from Nippon Steel and Sojitz for a 49% stake in the project, with Champion Iron retaining a 51% equity interest.
The partners will share development and construction costs according to their ownership interests, potentially providing up to $490m in contributions before Champion requires additional capital.
A definitive feasibility study (DFS) is expected to be completed by mid-2026, with a 48-month construction period following a final investment decision (FID).
Upon closing, Champion will hold a 51% equity interest in Kami, while Nippon and Sojitz will have 30% and 19% stakes, respectively.
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By GlobalDataNippon managing executive officer Ryuichi Nagai said: “Securing the supply of direct reduction quality iron ore is a critical strategic advantage for Nippon as we pursue our transition to reduce emissions in steelmaking.
“Kami benefits from one of the best resources and is one of the most advanced direct reduction quality iron ore projects globally. Our long-term relationship with Sojitz and Champion’s proven technical expertise in the Labrador Trough provides a robust foundation to advance the project as we evaluate its potential development.”
The partners will receive production allocations based on their ownership proportions. The $245m contribution includes an initial $68.6m payment upon closing, followed by $176.4m after the DFS, contingent on a positive interim investment decision (IID).
Champion will maintain operatorship of the project, overseeing its development and potential operations.
Champion Iron CEO David Cataford said: “We are excited to partner with global industry leaders, who share our long-term vision for Kami to produce high-purity iron ore, which was recently recognised as a critical mineral by the Newfoundland and Labrador, Québec and Canadian federal governments.
“Attracting such industry leaders highlights the rare quality of the Labrador Trough’s resources and the region’s proven ability in constructing and sustainably operating sizeable high-purity iron ore projects. The financial support and collaboration provided by the partners mark an important milestone as we work on elements required to optimise the project towards a potential FID.”
The transaction is expected to close in the first half of 2025, subject to negotiation and finalisation of agreements, including a framework agreement and a partnership agreement.
Sojitz Metals mineral resources & recycling division COO and executive officer Osamu Matsuura said: “Sojitz’s investment creates an opportunity to procure a critical material for its customers’ evolving procurement needs.
“Through our years of marketing partnership with Champion, since the recommissioning of their Bloom Lake mine, their team demonstrated remarkable reliability in building and operating sustainable projects while supplying stable high-quality products for our clients. Our company is excited to partner with such credible groups to potentially develop this project, which is required to respond to our clients’ current and future needs.”
In the near term, the partnership will advance the Environmental Impact Statement required by the Government of Newfoundland and Labrador and engage with local stakeholders including First Nations groups.
Discussions with governments will also be pursued to seek support and evaluate opportunities to improve project economics.
The partnership aims to complete the DFS, leveraging the pre-feasibility study completed in March 2024, before considering an IID and FID.
