TORONTO, Jan 2 (Reuters) - Shares of Canada's iron ore miners rose on Wednesday, buoyed by rising iron ore prices and ArcelorMittal's $1.1 billion deal to sell a minority stake in its Eastern Canadian operations to an Asian consortium.

New producer Labrador Iron Mines Holdings Ltd led the way, climbing more than 18 percent to C$1.30 in high-volume trading on the Toronto Stock Exchange. Explorer Champion Iron Mines Ltd was up nearly 11 percent at 71 Canadian cents.

The gains came as the world's largest steelmaker said it agreed to sell a 15 percent stake in ArcelorMittal Mines Canada to a consortium that includes South Korean steelmaker POSCO and Taiwan-listed China Steel.

Iron ore is the main ingredient used to make steel.

"Certainly, the one thing that it does do, is it highlights the perceived value amongst steelmakers of the iron operations in the Labrador Trough," said Adam Low, a base metal mining analyst with Raymond James Ltd.

The Labrador Trough is Canada's main iron ore mining district. It extends along the border between Quebec and Labrador and is home to projects owned by ArcelorMittal, Rio Tinto Plc and Cliffs Natural Resources Inc, along with numerous smaller players.

The region has been a target of Asian investment in recent years, including deals with Japan's Mitsubishi Corp, China's Wuhan Iron and Steel and India's Tata Steel , among others.

"Essentially all the major Asian steel-producing countries now own stakes in the Labrador Trough, which is a huge validation for the quality of the mining operations and the ore in that region," Low said.

He noted that higher iron ore prices were also contributing to stock gains. The benchmark price for 62-percent grade iron ore <.IO62-CNI=SI> hit $144.90 per tonne on Monday, up from $86.70 per tonne in September.

Labrador Iron Ore Royalty Corp, which holds a stake in Rio Tinto's Iron Ore Company of Canada, rose 4.68 percent to C$36.01 on Wednesday, while New Millennium Iron Corp, which is working with Tata Steel, climbed 6.25 percent to C$1.36.

The share gains come after months of losses for Canada's iron ore producers and exploration companies, whose stocks were battered in 2012 as a sharp drop in iron ore prices led to worries over the health of the global steel industry.

"Most of these stocks were cut by more than 50 percent over the course of the year," said Michael Scoon, an analyst with Stifel Nicolaus. "Most of them are really beaten up." (Reporting by Julie Gordon; Editing by Dan Grebler)