New Millennium Capital will develop the Taconite project, which comprises the LabMag and KéMag iron ore deposits in Canada, for Tata Steel Global Minerals.

Under the terms of the binding heads of agreement , Tata Steel will participate in a feasibility study for the Taconite project and contribute 64% of the related costs .

After completion of feasibility study, the two firms will enter into a joint venture agreement and Tata Steel will develop one or both of the deposits.

The firm plans to provide funds of up to $4.85bn if both deposits are developed, about $4.68bn if KéMag alone is developed or $3.76bn if LabMag alone is developed.

New Millennium Capital President and CEO Robert Martin said the agreement will provide the framework to take the project through to development and, ultimately, production.