Canada-based iron-ore miner Champion Iron has announced the proposed acquisition of the Pointe Noire pelletising plant, located next door to the port facilities that it currently uses, with a view of recommissioning the plant to produce direct reduction-grade pellets.

A subsidiary of Champion will buy the idled pellet plant from Société Ferroviaire et Portuaire de Pointe-Noire for $2.5-million in cash. The company says that the plant will require significant investments prior to recommissioning, including structural work, rehabilitation and enhancement of existing equipment.

Commissioned in 1965, the plant in Sept-Iles, Québec, has an original pelletising nameplate capacity of six-million tonnes a year and was put on care and maintenance in 2013.

Champion entered into a memorandum of understanding (MoU) with a major international steel producer to complete a feasibility study to evaluate the recommissioning of the plant.

The feasibility study is expected to be completed in 2023.

Subject to positive findings and results of the study, the MoU outlines a framework for a joint venture to produce direct reduction-grade iron-ore pellets for sale to third parties, including the feasibility study partner.

Pursuant to the purchase agreement, Champion is required to comply with various undertakings in connection with the pellet plant, including a commitment to design and operate the project using exclusively green energy sources, including electricity, natural gas, biofuels or renewable energy as main power sources.

Champion CEO David Cataford said the proposed acquisition represents a strategic opportunity for the company to further deploy its vision to contribute to the green steelmaking supply chain.

“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. This project, together with other opportunities for organic growth, aims to create a positive impact for local communities and represents an additional step to unlock the region's full potential, including additional product processing and transformation, as demand for high-purity iron-ore products rises globally."

Champion, through its subsidiary Quebec Iron Ore, owns and operates the Bloom Lake Mining Complex, located on the south end of the Labrador Trough, about 13 km north of Fermont, Québec.