Champion Iron has signed a deal to acquire the Pointe Noire iron ore pelletising facility in Sept-Iles, Québec, Canada from Société Ferroviaire et Portuaire de Pointe-Noire (SFPPN) for a cash consideration of C$2.5m ($1.95m).
In addition to that, the company signed a memorandum of understanding (MOU) with a major global steelmaker. Under the MOU, the parties will undertake a feasibility study for assessing the re-commissioning of the pellet plant and produce direct reduction grade pellets.
The feasibility study is expected to be wrapped up next year. Subject to positive findings and results of the study, the MOU outlines a framework for creating a joint venture for producing direct reduction grade iron ore pellets to be sold to third parties, including the steelmaker.
The facility is directly located near the port facilities that are currently used by Champion Iron. It was commissioned in 1965 and had an original pelletising nameplate capacity of six million tonnes per annum.
The Pointe Noire iron ore pelletising plant has been on care and maintenance since 2013.
Champion Iron said that owing to its strategic location near Pointe Noire’s deep-water berth and train unloading infrastructure, the pellet plant could offer a relatively quick opportunity for commercial production.
Champion Iron CEO David Cataford, said: “The proposed acquisition of the Pellet Plant represents a strategic opportunity for our Company to further deploy its vision to contribute to the green steelmaking supply chain.
“Our local support, high-purity iron ore products, access to world class infrastructure and operational track record, enabled us to attract a major international steel producer for a potentially significant large-scale project in Québec.
“This project, together with other opportunities for organic growth, aim to create a positive impact for local communities and represents an additional step to unlock the region’s full potential, including additional product processing and transformation, as demand for high-purity iron ore products rises globally.”
The plant is expected to see considerable investments before its re-commissioning. The investments will be made in structural work, rehabilitation and improvement of existing equipment for maximising productivity and energy efficiencies while minimising its environmental impact.
