*

Nippon Steel ( NISTF ) and Sojitz ( SZHFF ) to pay $152 million for Kami

project

stakes

*

Nippon Steel ( NISTF ) to take 30% stake, Sojitz ( SZHFF ) 19%

*

Champion Iron ( CIAFF ) to retain operational control of Kami

*

Feasibility study expected to be completed by mid-2026

(Adds details of deal from paragraph 2, quote from Champion CEO

in paragraph 5, quote from Nippon Steel ( NISTF ) in paragaph 12)

Dec 19 (Reuters) - Australia's Champion Iron ( CIAFF )

said on Thursday Japanese steelmaker Nippon Steel ( NISTF ) and

trading house Sojitz ( SZHFF ) will buy a 49% stake in the

company's Kami project in Canada for A$245 million ($152

million).

Nippon and Sojitz ( SZHFF ) will hold a 30% and 19% stake respectively

in the iron ore project in Canada's northeast, and share

development and construction costs based on their share in the

mine, Champion said in a statement.

Kami, which Champion acquired in 2021, is also expected

to receive as much as A$490 million ($305 million) through

future contributions from Nippon and Sojitz ( SZHFF ), it added.

Champion's CEO David Cataford said the deal underlined

Kami's potential.

"The financial support and collaboration provided by the

Partners mark an important milestone," Cataford said in the

statement.

Nippon, Japan's largest and the world's No. 4 steelmaker, is

looking to optimise its supply chain from Kami, the company's

Managing Executive Officer Ryuichi Nagai said.

Nippon Steel ( NISTF ), which currently has a global production

capacity of 65 million tons a year, is looking to raise that to

100 million tons a year in the long term.

It is currently trying to

secure U.S. approval

for its acquisition of U.S. Steel, a key part of that

strategy, and has also been looking to buy stakes in

coking coal and iron ore mines

to ensure a stable supply of essential raw materials.

Nippon will invest C$150 million ($104 million) for its

stake in Kami, while incurring about C$1.16 billion in

development costs by the project's completion, the company said

in a statement. The costs will be subject to investor approval

of the project's development and the results of a future

feasibility study, it added.

Kami is an advanced-stage open-pit iron ore mining project

and offers an opportunity to secure the supply of direct

reduction iron ore, Nippon Steel ( NISTF ) said.

Direct reduced iron, along with high-quality scrap, are

necessary for the production of high-grade steel from large

electric arc furnaces, which Nippon Steel ( NISTF ) aims to build to

reduce carbon emissions

.

"Iron ore to be produced at Kami will be used for hot

briquetted iron (HBI), not as conventional iron ore for blast

furnaces... so this is an investment for future production,"

Shingo Nakamura, a senior executive at Nippon Steel ( NISTF ), told

reporters in Tokyo.

The project feasibility study is expected be completed

in mid-2026, and construction would take about four years once

the final investment decision is agreed, the statement said.

Nippon Steel ( NISTF ) estimated costs for all partners in the

Kami project at nearly C$4 billion.

Kami is in Newfoundland and Labrador, a few kilometres

from Champion's operating Bloom Lake mine in Quebec.

Champion filed a pre-feasibility study for Kami in March

2024.

($1 = 1.4439 Canadian dollars)