SYDNEY, N.S. Nova Scotias Economic Development Department is spending $400,000 for a feasibility and power rate study on the establishment of a metallic production facility in Sydney.

International Iron Beneficiation Group Ltd. is interested in building a manufacturing plant that would convert superfine iron ore into metallic iron units used for steel production.

If the project proceeds, the company will have to meet all federal and provincial environmental regulations.

Enterprise Cape Breton Corp. is giving $300,000 for the studies, while the company is responsible for the remaining cost, which could exceed $2 million.

International Iron Beneficiation Group Ltd. is an affiliate of OAO Severstal, a steel and steel-related mining company.

The feasibility study and power rate study is expected to be completed in 2014.

A final decision on whether to proceed with the project will be made by the company once the studies are completed.