Wisco finalises iron ore joint venture with Canada's Adriana

Major central China steel producer Wuhan Iron & Steel Group (Wisco) has secured another overseas iron ore investment after concluding a deal with Canada’s Adriana Resources (ADI) to co-develop the latter’s Lac Otelnuk deposits in northern Québec.

The agreement, in train since the beginning of this year, was signed in Beijing on 30 August, Wisco said. This was two months later than the original deadline set in March, but no explanation was given for the delay, Steel Business Briefing notes.

Wisco officials in charge of overseas resource developments were unavailable to provide additional details of the project but SBB understands from ADI’s previous releases that Wisco will pay C$92m ($93m) in exchange for a 60% stake in the venture.

Wisco has been making efforts to secure its own overseas iron ore resources to reduce its reliance on purchased imports. The top-tier steelmaker has remained resolute in seeking potential targets in Canada despite losing the bidding for Consolidated Thompson Iron Mines to US-based Cliffs Natural Resources back in May, SBB notes.

Lac Otelnuk contains 6.5bn tonnes of iron ore at 29% Fe content on average with the cut-off grade at 18%, ADI’s latest drilling results stated. Wisco became ADI’s largest shareholder on 18 May, buying a 19.9% stake in the Toronto-based miner for C$28m.

Best,

Scott