Champion Iron Limited (TSX: CIA) has achieved a significant milestone in advancing its high-purity iron ore project, Kami, located in Newfoundland and Labrador, Canada. The Australian mining company announced a pivotal partnership with Japan’s Nippon Steel Corporation and Sojitz Corporation.
Under the agreement, the Japanese firms will acquire a 49% stake in the Kami project for A$245 million and contribute up to A$490 million for development and construction costs.
The Kami project is an advanced-stage iron ore venture positioned to produce direct reduction quality iron ore, critical for environmentally sustainable steel production. Unlike conventional blast furnaces, direct reduction-grade iron ore feeds electric arc furnaces, which produce high-quality steel with lower carbon emissions.
“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,” Ryuichi Nagai, Managing Executive Officer of Nippon Steel, stated.
The firm said the move aligns with Nippon Steel’s broader decarbonization goals, which include increasing its global steel production capacity to 100 million tons annually.
Nippon Steel and Sojitz will hold 30% and 19% stakes, respectively, while Champion Iron retains a 51% equity interest and remains the project’s operator. The initial A$245 million investment includes A$68.6 million paid upfront, with the remaining funds contingent on a positive interim investment decision following a definitive feasibility study.
“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 final investment decision,” said Champion Iron CEO David Cataford.
The feasibility study, expected by mid-2026, will build on a pre-feasibility study completed in March 2024. Pending a positive investment decision, construction could take an additional four years.
Champion Iron last traded at $5.10 on the TSX.
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