LONDON: TSMC is a joint venture between Tata Steel and the Alberta-based New Millennium Iron Corporation (NML) with the steelmaker being the majority partner with 94 per cent stake.
Tata Steel has cut down on iron ore mining operations as well as stabilisation measures at its plant in Canada due to “challenging conditions” in steel and ore markets, a move that will impact jobs.
The scaling down is taking place at Tata Steel Minerals Canada’s (TSMC) Direct Shipping Ore (DSO) project involving mining, crushing, washing, screening and shipping the sinter fines and pellet fines to Tata Steel’s European steel making facilities. TSMC is a joint venture between Tata Steel and the Alberta-based New Millennium Iron Corporation (NML) with the steelmaker being the majority partner with 94 per cent stake. It is developing iron ore deposits in Quebec and Newfoundland and Labrador in Canada. “TSMC, in which NML holds a 6 per cent interest, is temporarily scaling down winter operations including stabilisation activities of the plant at its DSO Project,” NML said in a regulatory filing earlier this month. The filing further said: “This action is in response to challenging conditions in the steel and iron ore markets and is expected to be reviewed on an ongoing basis. The number of TSMC employees affected will be based on operational needs, including services and maintenance.” In October last year, Tata Steel had said it will review its agreement with NML on developing iron ore sites in Canada. Tata Steel, through its wholly-owned subsidiary Tata Steel Global Minerals Holdings Pte Ltd, owns about 26.2 per cent of NML’s shares and is its largest shareholder and strategic partner. According to market analysts, the last few years have been one of the most challenging for iron ore industry. Prices of the ore have plunged, particularly on account of subdued demand in China. It is at a time when new supply from previously committed projects in Australia and Brazil is flooding the market. This has resulted in weak financing conditions and sharp declines in sales and profits for all mining companies. Iron ore is the key ingredient used in making steel. Due to the economic slowdown globally and in China, the world’s biggest consumer of steel, demand for the metal has gone down amidst continued production. It has not only impacted steel prices, but has also had a cascading effect on raw materials including iron ore. On Wednesday, Tata Steel signed an in-principle agreement with the Quebec government to develop iron ore deposits in the Canadian province, a move that can help the steelmaker reduce its raw material costs. It relates to the provincial government’s participation with TS Global Minerals Holdings’ in DSO Project in the Schefferville area. Both parties will also work on developing the transit for iron ore from Arnaud Junction to the multiuser dock at the Port of Sept-Iles.–PTI
