CoTec-Backed MagIron Buys Reynolds Pellet Plant to Build First U.S. Merchant Pig Iron Operation

CoTec Holdings ( (TSE:CTH) ) has issued an announcement.

MagIron LLC, in which CoTec Holdings owns a 16.5% fully diluted stake, has signed a binding agreement to acquire the restart-ready Reynolds Pellet Plant in Indiana from Altos Hornos de Mexico, a facility that has previously produced up to 2.2 mtpa of iron ore pellets and was designed for expansion to 3.0 mtpa. Once the deal closes, MagIron will control a fully integrated portfolio comprising an iron ore concentrator, rail load-out and pelletizer built at a combined cost of about US$660 million, and plans to restart DR-grade pellet production and pursue development of the first vertically integrated merchant pig iron operation in the United States in partnership with Primetals Technologies. Management claims the transaction, supported by extensive technical, commercial, legal and environmental due diligence, will underpin a domestic, lower-impurity supply chain for pig iron, reducing U.S. reliance on imports, strengthening supply security for key industries and potentially enhancing returns for CoTec given the higher market prices for pig iron relative to DR pellets, while the acquisition and restart funding will occur at MagIron rather than CoTec level.

More about CoTec Holdings

CoTec Holdings Corp. is a Vancouver-based investment company with a focus on emerging, value-accretive opportunities in the resources and industrial sectors. Through its 16.5% fully diluted equity stake in MagIron LLC, CoTec is exposed to the U.S. iron ore, direct reduction (DR) grade pellet and merchant pig iron markets, particularly targeting supply into America’s electric arc furnace steel industry and broader strategic sectors such as automotive, aerospace and defense.

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Technical Sentiment Signal: Buy

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