China's Baosteel to buy stake in Canadian nickel explorer Noront

Huaihua, Hunan (Platts)--4May2011/316 am EDT/716 GMT

Chinese steelmaker Baosteel Group's resources unit has agreed to invest at least C$17.4 million ($18.2 million) for a 9.9% stake in Canadian nickel explorer Noront Resources, the Canadian company said Monday.

The investment will allow Baosteel to nominate a person to Noront's board of directors and to increase its stake to 19.9% for one year starting April 18, 2012. The companies have agreed on a standstill provision that expires on April 18, 2013.

Noront expects to gain access to China's expanding stainless steel industry through Baosteel.

Toronto-based Noront holds a mineral title to the so-called Ring of Fire area in James Bay Lowlands in northern Ontario, which includes the Eagle's Nest and Blackbird deposits.

Eagle's Nest contains nickel, copper, platinum and palladium, while Blackbird is a chromite deposit.

A feasibility study being conducted on Eagle's Nest is targeted for completion in the first half of 2011, according to Noront's website.

--Reggie Le, newsdesk@platts.com

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