Champion Iron Partners with Nippon Steel and Sojitz for Kami Project

Champion Iron's Strategic Partnership for Development

Champion Iron Limited is thrilled to announce a significant partnership with two major industry players—Nippon Steel Corporation and Sojitz Corporation. Together, they aim to advance the development and feasibility assessment of the Kami Project, a promising iron ore project. This partnership marks a crucial step forward for Champion, emphasizing the company’s commitment to becoming a leader in the production of high-purity iron ore.

Financial Commitment and Project Ownership

Under this new alliance, Nippon and Sojitz are set to invest $245 million to acquire a 49% stake in the partnership. Champion will maintain a majority 51% interest in the Kami Project and oversee its operational aspects. This strategic investment is crucial for facilitating the future financial performance and operational development of the Project. Once the definitive feasibility study (DFS) is completed, the partners will collectively share the development and construction costs based on their respective ownership interests. Overall, the investment could lead to up to $490 million in contributions before Champion needs additional capital funding.

Potential of the Kami Project

Champion's CEO, Mr. David Cataford, expressed his excitement about collaborating with globally recognized companies. He highlighted that high-purity iron ore, a focus of theKami Project, has garnered attention as a critical mineral in recent governmental acknowledgments. The initiative is poised not only to foster economic growth in Labrador West but also to support sustainable steelmaking practices on a global scale.

Industry Experts Weigh In

Nippon's Managing Executive Officer, Ryuichi Nagai, emphasized the strategic advantage that securing a supply of high-quality iron ore brings to their operations, especially in the evolving landscape of steel production focused on reducing emissions. He noted that the Kami Project ranks among the world’s most advanced direct reduction iron ore projects, enhancing Nippon's supply chain sustainability.

Partner Perspectives on Sustainability

Osamu Matsuura, Sojitz’s COO, shared insights on how this Partnership aligns with the broader steel industry’s commitment to lowering emissions. He praised Champion's reliable track record in managing sustainable projects, which bodes well for future ventures. This collaboration signals a shift toward ensuring a stable supply of essential materials while adhering to environmental standards.

Next Steps in Project Development

The next phase involves entering a framework agreement to guide the Project toward a potential interim investment decision (IID) and subsequent final investment decision (FID). Expected timelines suggest that the DFS will conclude by mid-2026, while the project construction phase could span about 48 months post-FID.

Equity Structure and Production Allocation

Upon closing the transaction, Champion will retain operational control of the Kami Project, with Nora and Sojitz holding minority stakes of 30% and 19%, respectively. The financial structure involves an initial $68.6 million payment followed by an additional $176.4 million contingent upon specific decision-making milestones, allowing Champion to potentially benefit from future earnings tied to the Project’s performance.

Environmental and Community Engagement

Going forward, the partnership will prioritize advancing the Environmental Impact Statement as mandated by local governing bodies. Engaging with local Indigenous communities will also be a key focus to forge positive relationships and ensure the Project benefits the surrounding region.

Exploring Economic Opportunities

Champion Iron is keen to explore potential government incentives and support following the recent classification of high-purity iron ore as a critical mineral. This strategic position is expected to enhance the Project's economics, especially as the company assesses opportunities through completed pre-feasibility studies and progress toward completing the DFS.

About Champion Iron Limited

Champion Iron Limited operates and holds a significant share in the Bloom Lake Mining Complex situated in the renowned Labrador Trough. With plans to optimize production and expand the capacity of the Bloom Lake mine, Champion aims to enhance its supply of superior iron ore products to meet global demand.

Frequently Asked Questions

What is the Kami Project focused on?

The Kami Project aims to produce high-purity iron ore, positioning itself within a critical mineral context recognized by various governments.

Who are the partners in the Kami Project?

The partners in the Kami Project are Champion Iron Limited, Nippon Steel Corporation, and Sojitz Corporation.

What are the investment details of the partnership?

Nippon and Sojitz will invest $245 million to hold 49% of the partnership, while Champion retains a 51% interest.

What role will Champion Iron play in the Kami Project?

Champion Iron will act as the primary operator of the project, overseeing its development and production.

How will environmental concerns be addressed?

The partnership is committed to completing the Environmental Impact Statement and engaging with local communities to ensure a positive impact.

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