Champion Iron Secures Investment from Japanese Firms

Date: Thursday

Shares of Australia's Champion Iron Ltd (ASX:CIA) increased after announcing that Japanese companies Nippon Steel Corp (TYO:5401) and Sojitz Corp. (TYO:2768) will acquire a 49% stake in its Kami project in Canada for A$245 million ($152.39 million).

Agreement Details

Under the agreement, Champion Iron may receive additional payments based on the project's financial success, with combined contributions potentially reaching A$490 million. Nippon Steel will hold a 30% stake, while Sojitz will hold 19%. If a positive final investment decision (FID) follows a feasibility study, development and construction costs will be shared according to ownership stakes.

Market Response

Champion shares rose nearly 4% to A$5.9, contrasting with a 1.9% decline in Australia's broader mining sub-index S&P/ASX 300 Metals & Mining on Thursday.

Project Objectives

This partnership focuses on producing high-purity iron ore, which has been designated a critical mineral by Canadian and provincial governments. The funds will support the permitting of a definitive feasibility study (DFS) expected by mid-2026, as well as eventual construction costs.

Strategic Importance

Ryuichi Nagai, Nippon Steel's Managing Executive Office, stated, "Securing the supply of direct reduction quality iron ore is a critical strategic advantage for Nippon as we pursue our transition to reduce emissions in steelmaking. Kami benefits from one of the best resources and is one of the most advanced direct reduction quality iron ore projects globally."

Champion Iron will continue to operate the project and oversee future developments. The transaction is anticipated to close in the first half of 2025.