NEW YORK Chinese steel producer Hebei Iron & Steel Group Co. Ltd. has made its final investment of Canadian $119.9 million ($117.3 million) in development company Alderon Iron Ore Corp. and its Kami iron ore project in eastern Canada.
Shijiazhuang-based Hebei Iron now owns 25 percent of the Kami Limited Partnership, which was established to own the Kami project, while Montreal-based Alderon holds the remaining 75-percent interest.
The C$119.9-million investment, which will be used to further develop the Kami project, is the final tranche of Hebei Irons total investment of C$182.2 million. The Chinese company now owns 19.9 percent of Alderons outstanding common shares.
Alderon and Hebei will both contribute to capital expenditures relating to the development of the Kami project not covered by initial capital contributions and project debt financing.
"Alderon now has both the initial capital and the China market access to build a leading company," president and chief executive officer Tayfun Eldem said. "We believe that this strategic partnership solidifies our ability to become the next major iron ore producer in the Labrador Trough."
As part of the strategic partnership, Hebei Iron will be obligated to purchase 60 percent of iron ore production from the Kami project once commercial production starts in late 2015.
A version of this article was first published by AMM sister publication Steel First.