Luxembourg-based resources company Northland Resources SA has announced that it has concluded a long-term off-take agreement with steelmaking company Tata Steel UK Ltd for a total of six million mt of iron ore concentrate from the Kaunisvaara iron ore project in northern Sweden, subject to final technical approval.
The contract is for an initial seven-year period and production is scheduled to begin in 2012. The pricing structure will reflect the value-in-use of the Kaunisvaara iron ore product. The iron ore will primarily be shipped to Tata Steel's plants in Europe.
In addition to the purchase and sale of iron ore concentrate, the parties have agreed to a close technical cooperation that will enhance product quality.
This is the second off-take agreement that Northland has signed. The first, which was for the delivery of one million mt per year of Kaunisvaara concentrate, was with London-based Stemcor, the world's largest independent steel trader.
When Kaunisvaara reaches full capacity during 2014, Northland is planning to produce 5 million mt of iron ore concentrate per year.