The Hindu reported that TATA Steel Minerals Canada Limited, a JV of the Indian steel maker last week secured key permission for land use related to its proposed iron ore project in north eastern Canada.

Toronto listed New Millennium Iron Corporation; TATA Steel’s 20% strategic partner said that TSML signed agreement with the appropriate aboriginal council of the south Labrador for the direct shipping ore project. It paves the way to use the land for mining and building infrastructure.

The council has powers to authorize use of land in the vast Millennium Iron Range area containing undeveloped magnetic iron deposits. The proposed DSO project primarily to feed TATA Steel Europe’s plants is located there.

The agreement will also benefit the project from the availability of qualified local people for operating and management roles. The DSO project, owned and operated by TSML is expected to begin shipping of iron ore to TATA Steel European units this financial year. TATA Steel has output offtake agreement with TSML.

The mining of ore has begun in certain pockets and TSML has also started putting in place production and logistics infrastructures. The initial production is projected at one million tonnes. The DSO project licence area contains 64.1 MT of proven and probable mineral reserves.

According to industry analysts, the DSO project has direct bearing on the raw material costs of Tata Steel’s European operations which does not have captive source of iron ore.