Champion Iron announced on Monday that it signed a definitive framework agreement with the two Japanese companies, formalizing the draft prepared in December 2024. According to the agreement, Nippon Steel will hold a 30% stake, Sojitz 19%, and Champion Iron 51% in the Kami Iron Ore Joint Venture established to carry out the project. Champion will also remain the operator of the project.
Investment Phases and Financial Structure
The partnership includes an initial funding tranche of USD 68.6 million, which will cover preparatory activities such as environmental permitting, community engagement, and the completion of a Definitive Feasibility Study (DFS), expected by the end of 2026. Upon a positive Final Investment Decision (FID), a second tranche of USD 176.4 million will be provided to support pre-construction and development work.
Champion Iron CEO David Cataford described the collaboration as “a major milestone for the Kami Project,” stating: “We are pleased to move forward with trusted partners who share our long-term vision and our commitment to communities, as we work to meet the global demand for high-purity iron ore.”
Phased Development Plan
The agreement foresees a two-phase closing process. The first closing is expected in the second half of 2025, following the fulfillment of various conditions including approvals from Chinese regulatory authorities. After the Definitive Feasibility Study, the final investment decision (FID) will be made, followed by the second closing.
According to the project plan announced in 2024, the Kami project will produce approximately 9 million tons of direct reduction (DR)-grade pellet feed annually, covering a 25-year mine life. This product, which contains high-purity iron, is of critical importance for hydrogen-based low-emission steel production technologies.
USD 3.86 Billion Investment and Future Outlook
It is estimated that approximately USD 3.86 billion in capital expenditures will be required for the full implementation of the project, and that the construction phase will take four years. The company’s preliminary feasibility analysis forecasts a post-tax internal rate of return (IRR) of 9.8%. In more optimistic pricing scenarios, this rate could rise to 14.8%.
Champion continues its contacts with public authorities to access critical mineral support programs provided at the federal and provincial levels across Canada.
Japan Turns to Canada for High-Quality Iron Ore
For Nippon Steel, this agreement represents a strategic step towards securing high-quality ore supply in line with its low-carbon targets. Sojitz will contribute to the project with its experience in resource financing and logistics.
Champion Iron currently operates the Bloom Lake mine in Québec and stands out among high-quality iron ore producers in North America amid increasing demand for green steel inputs. The Kami project holds a critical position in this growth strategy, due to its proximity to infrastructure and previously conducted permitting processes.
Comments
No comment yet.