The possibility that Eastern Canada could become a global heavyweight in iron ore production, a domestic version of the current behemoths in the mineral such as Brazil and Australia, is beginning to make the rounds on Bay Street as an investment idea with big promise.

The concept was highlighted Monday by news that India's TATA Steel Limited had agreed to a deal worth up to USD 4.85 billion to develop deposits in the region owned by New Millennium Capital Corporation In January, another company active in the area, Consolidated Thompson Iron Mines Limited received a USD 4.9 billion takeover offer from Cliffs Natural Resources Inc.

Such big dollar expressions of interest are leading many brokers and mining newsletters to begin touting the entire area as an investment possibility that will profit from the burgeoning market for the distinctive, red tinted ore.

Desjardins Securities, for instance, recently hosted a conference featuring the potential of the area, suggesting it could be producing more than 100 million tonnes of ore annually, or about triple current levels, by 2020. Desjardins doesn’t have any current picks, but its two most recent in the sector Consolidated Thompson and Baffinland Iron Mines Corporation were subject to takeover offers. Everything we covered got taken out.

Mr John Hughes base metals analyst at Baffinland Iron Mines Corporation said that an added attraction is that the ores being discovered are about 15% richer than those in Australia, a huge plus for a bulky commodity that is costly to ship.

(Sourced from www.ctv.ca)