TATA Steel Ltd's managing director Mr HM Nerurkar said in Montreal that his company is ready to invest almost USD 5 billion in Quebec-Labrador to get away once and for all from violent market swings in iron ore prices.

TATA Steel investment in Quebec-Labrador is aimed at giving TATA Steel Europe a fully captive source of iron ore for the next 100 years.

Mr Nerukar said that "We could produce 69% iron content ore at a cash cost of USD 30 a tonne, while spot market prices are now about USD 180 up from USD 40 five years ago. Steelmakers need stability in their principal raw material."

TATA Steel plans to develop and finance the $4.85-billion taconite project straddling the Quebec-Labrador border north of Schefferville with partner New Millennium Capital Corp. It would have annual capacity of 22 million tonnes.

It would be a fly-in, fly-out operation, and the crude ore would be crushed and beneficiated into a black powder like flour, Millennium CEO Robert Martin said. Then it will be processed into pellets for shipment to Sept Îles for export to Europe. Alternatively, it could be compressed into boulettes in a rehabilitated pellet plant near Sept Îles.

The project would provide more than 5,000 construction jobs and 1,200 permanent jobs. Mr Martin said that "We wouldn't be paying USD 50 million for the feasibility study due late 2012 if we weren't confident of a go-ahead and the benefits for Quebec and Labrador economically.”

(Sourced from www.montrealgazette.com)