It is reported that TATA Steel feels that the global iron ore market looks incredibly tight and like many of their competitors they also needs to secure a reliable source of supply.

Mr HM Nerukar MD of Indian giant TATA Steel Ltd said that “It appears at least for the next five or seven years, there’s going to be a difficult situation in iron ore because we don’t see any big new sources coming onto the market.”

Mr Nerurkar said that TATA Steel looked to Canada, South Africa and Ivory Coast for iron ore investments but Canada is the most secure of the three.

He added that “Unfortunately, right now you have two presidents in Ivory Coast. They have to solve these problems.”

The company this month signed a landmark agreement with Canadian miner New Millennium Capital Corp to develop the Taconite iron ore deposit in Labrador and Quebec. The USD 4.9 billion project, which holds a mind-boggling 9.2 billion tonnes of resources, is expected to be the largest mine in Canadian history. It would be almost impossible for such a large project to go ahead without financing from a major steel company like TATA.

The output from Taconite will go straight to TATA Steel’s European steelmaking operations, which it acquired in 2007.

While the company’s flagship Indian operations are fully served by domestic supply, it needed a source for Europe, and Canada provides just that.

(Sourced from www.financialpost.com)