Investing.com– Australia’s Champion Iron Ltd (ASX:CIA) shares rose on Thursday after the company said Japanese firms 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).
Under the agreement, Champion Iron will potentially receive additional payments based on the project’s financial success. Combined contributions could reach A$490 million, the company said.
Nippon and Sojitz will hold a 30% and 19% stake, respectively, in the Kami project. If a positive final investment decision (FID) is made after completing a feasibility study, development and construction costs will be shared based on ownership stakes.
Champion shares rose nearly 4% to A$5.9, while Australia’s broader mining sub-index S&P/ASX 300 Metals & Mining fell 1.9% on Thursday.
The partnership aims to produce high-purity iron ore, recently designated a critical mineral by Canadian and provincial governments. The funds will support permitting a definitive feasibility study (DFS) expected by mid-2026, and eventual construction costs.
“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,” Nippon Steel’s Managing Executive Office Ryuichi Nagai said.
Champion Iron will remain the operator of the project and oversee potential developments and future operations.
The Transaction (JO:TCPJ) is expected to close in the first half of the 2025 calendar year, the company said in a statement.
