Hebei Iron & Steel Group (Hegang), China's largest steelmaker by capacity, is now 25% owner of the Kami iron ore project in eastern Canada's Labrador Trough, the company announced Monday.

This follows the completion of all formalities relating to the investment in Kami, its first mining investment in Canada, Hegang said in the statement.

On March 27 the Chinese steel producer made the final payment of C$119.9 million ($118 million) for its stake to Alderon Iron Ore, Hegang's Canadian partner and owner of the remaining 75% of the Kami project. All up, the Hebei province-based steelmaker has paid C$182.2 million for its quarter-share in the project.

Hegang and Alderon agreed a strategic partnership in April 2012 that also saw Hegang buy a 19.9% share in Toronto-listed Alderon last September.

With a capital cost of US$42.2 million, the Kami project envisages a mine life of 30 years at 8 million mt/year of concentrate at 65.2% iron content, Alderon disclosed in a March 27 statement. Commercial mining will commence in fourth quarter 2015, it said.

Hegang has committed to 60% offtake of Kami's output, with the price based on the monthly Sinter Feed fines Platts IODEX price. This includes an additional quoted premium for iron content greater than 62% but with a 5% discount, Alderon said.

Hegang has the option to purchase the other 40% of Kami production or to help find other buyers for it, the Canadian company said.

Headquartered in Shijiazhuang city, Hebei, Hegang hosts a combined 50 million mt/year of crude steel capacity from its six steel subsidiaries. The firm's target is to increase iron ore self-sufficiency to 40% in captive domestic and overseas iron ore mines by 2015. Its iron ore self-sufficiency ratio reached 10% last year