Iron-ore mining company Champion Iron has formalised a strategic partnership with Japan’s Nippon Steel and trading house Sojitz, securing $245-million in funding for its Kami project in eastern Canada, as the company seeks to ride a wave of global demand for high-purity feedstock used in green steelmaking.

The miner announced on Monday it had entered into a definitive framework agreement with the two Japanese giants, finalising a pact first outlined in December. Under the deal, Nippon Steel and Sojitz will take a combined 49% interest in a newly formed entity, Kami Iron Mine Partnership, created to advance the Kami project in Newfoundland and Labrador.

The initial phase of the agreement will see the partners contribute $68.6-million to the venture, with further pro-rata payments to fund the permitting process, community engagement, and completion of a definitive feasibility study (DFS) expected by the end of 2026. A second funding tranche of $176.4-million is expected following a positive interim investment decision, which would trigger pre-construction and development activities.

Champion Iron will retain a 51% interest in the partnership and will remain operator of the project. Nippon Steel will hold a 30% stake, and Sojitz 19%.

CEO David Cataford described the framework agreement as a turning point for the Kami project. “The framework agreement marks a significant milestone for the Kami project, establishing a clear structure to advance its evaluation alongside trusted partners who share our long-term vision for the growing demand for high-purity iron-ore and our commitment to positively impact the communities where we operate,” he said.

“Supported by anticipated proceeds and the partners' pro-rata contributions of future expenditures, the partnership will enable us to advance the project without impacting our financial liquidity in the foreseeable future. As we move forward, our focus will shift to identifying opportunities to enhance the project's economics while remaining committed to our disciplined capital allocation strategy.”

PHASED DEVELOPMENT PATH
The agreement outlines a two-step closing structure. The first closing – expected in the second half of 2025 – remains subject to several conditions, including regulatory clearance from China’s State Administration for Market Regulation and other customary approvals. The second closing, contingent on a positive DFS and investment decision, is expected several months after the study’s completion.

The DFS is key to de-risking what is expected to be a major undertaking. The Kami project study, filed in 2024, outlined a 25-year mine life with output of about nine-million tonnes a year of direct reduction (DR) grade pellet feed – a premium iron-ore product grading above 67.5% iron. The material is critical for low-emission steelmaking technologies such as hydrogen-based direct reduction.

The project is expected to require about $3.86-billion in capital expenditure and take four years to construct once a final investment decision (FID) is made. Champion’s prefeasibility estimates indicated a post-tax internal rate of return of 9.8%, or 14.8% under more favourable pricing scenarios.

The partnership comes as governments across Canada ramp up support for critical minerals, including high-purity iron-ore. Champion said it would continue working with federal and provincial authorities to access potential funding and support mechanisms.

JAPANESE STEELMAKERS SEEK SECURE SUPPLY
For Nippon Steel, which is Japan’s largest steelmaker, the deal marks another step toward securing long-term supply of high-grade ore as it looks to decarbonise its operations. Sojitz brings to the table extensive experience in resource financing and logistics.

The agreement also underscores continued Japanese interest in Canadian resources, particularly as geopolitics increasingly reshapes global commodity flows.

Champion Iron, which already operates the Bloom Lake mine nearby in Québec, has positioned itself as a key North American producer of high-grade iron-ore amid growing demand for green steel inputs. The Kami project, located just south-east of Bloom Lake, leverages proximity to infrastructure and previously completed permitting work from prior owners.