Champion Iron Ltd. plans to purchase the Pointe Noire iron ore pelletizing facility located in Sept-Iles, Québec, for $2.5 million. The company also said it has entered into a Memorandum of Understanding (MoU) with a major international steelmaker to complete a feasibility study to evaluate the recommissioning of the pellet plant and produce direct-reduction-grade pellets.

“The proposed acquisition of the pellet plant represents a strategic opportunity for our company to further deploy its vision to contribute to the green steelmaking supply chain,” Champion CEO David Cataford said. “Our local support, high-purity iron ore products, access to world-class infrastructure and operational track record, enabled us to attract a major international steel producer for a potentially significant large-scale project in Québec.”

Located directly adjacent to Campion Iron’s port facilities, the pellet plant, which was commissioned in 1965 with an original pelletizing nameplate capacity of 6 million metric tons per year (mt/y), was placed on care and maintenance in 2013. In addition to the cash consideration, the SFPPN and the region stand to receive additional economic benefits as Champion considers recommissioning the Pellet Plant, according to the company. With Pointe Noire’s deep-water berth and train unloading infrastructure, Champion Iron believes the pellet plant could provide a relatively rapid opportunity for commercial production. The company said it will require a significant investment prior to recommissioning, including structural work, rehabilitation and enhancement of existing equipment, to maximize productivity and energy efficiencies while minimizing its environmental impact.

The feasibility study, which is expected to be completed in 2023, will evaluate the investments required to recommission the Pellet Plant while integrating up-to-date pelletizing and processing technologies. The purchase agreement stipulates that Champion commit to design and operate the project using exclusively green energy sources including electricity, natural gas, biofuels or renewable energy as main power sources.

Champion Iron, through its subsidiary Quebec Iron Ore Inc., owns and operates the Bloom Lake iron ore mining complex, located on the south end of the Labrador Trough, approximately 13 km north of Fermont, Québec. Bloom Lake is an open-pit operation with two concentrators that primarily source energy from renewable hydroelectric power. The Bloom Lake Phase I and Phase II plants have a combined nameplate capacity of 15 million mt/y and produce a low contaminant high-grade 66.2% Fe iron ore concentrate with a proven ability to produce a 67.5% Fe direct reduction quality concentrate.