Champion Iron has entered into a formal agreement with Nippon Steel and Sojitz to develop the Kami iron ore project in Labrador, Canada.
The definitive framework agreement outlines an initial investment of C$245m ($179m) from Nippon Steel and Sojitz, granting them a 49% stake in the new partnership. Champion Iron retains a 51% interest and will lead project development and operations.
This partnership is structured in two phases, with the initial phase requiring regulatory approval from China’s State Administration for Market Regulation, among other conditions. Completion is expected in the latter half of 2025.
During this phase, Nippon Steel and Sojitz will contribute C$68.6m ($50.1m) to secure their interests.
Subsequent investment decisions are contingent on the completion of a definitive feasibility study (DFS), anticipated by the end of 2026. Following the DFS, Nippon Steel and Sojitz are slated to invest an additional C$176.4m ($129m), contingent upon positive interim and final investment decisions.
The partnership agreement stipulates that project costs will be shared according to ownership percentages. The partners will also receive iron ore allocations proportionate to their stakes.
Governance will be managed by a six-member committee with equal representation from Champion Iron, Nippon Steel, and Sojitz.
Champion CEO David Cataford said: “The framework agreement marks a significant milestone for the Kami project, establishing a clear structure to advance its evaluation alongside trusted partners who share our long-term vision for the growing demand for high-purity iron ore and our commitment to positively impact the communities where we operate.
“Supported by anticipated proceeds and the partners’ pro-rata contributions of future expenditures, the partnership will enable us to advance the project without impacting our financial liquidity in the foreseeable future. As we move forward, our focus will shift to identifying opportunities to enhance the project’s economics while remaining committed to our disciplined capital allocation strategy.”
Champion Iron said that it has commenced work on an environmental impact statement, engaging with local stakeholders, including Indigenous communities, to ensure collaborative project development. The company is also exploring government support following the designation of high-purity iron ore as a critical mineral in Canada.
The Kami project aims to produce Direct Reduction grade iron ore concentrate over its projected 25-year lifespan. The estimated construction period is four years post-final investment decision, with capital expenditures forecasted at C$3.86bn ($2.8bn).
