Posted on 23 Aug 2024
Two Japanese steelmakers, Nippon Steel Corporation and JFE Steel Corporation, have signed with Australian coking coal supplier Whitehaven Coal Limited (WHC) to acquire a combined 30% interest in the Blackwater coal mine (BW coal mine) as well as signing a long-term coal offtake agreement.
Nippon Steel and JFE Steel estimate they will spend $720 million and $360m for 20% and 10% stakes in the BW coal mine, respectively. The transactions are expected to complete in Q1 2025, and this mine will be owned by the three counterparties via an unincorporated joint venture at that point. This will be managed by WHC.
BW is a large scale open-pit coal mine located in the Bowen Basin in Central Queensland, Australia. The run-of-mine coal production has been around 12-13m t/y in recent years with both hard coking coal and semi-soft coking coal products. It ships coking coal to Asian customers through the RG Tanna Terminal north of Gladstone.
The implementation of policies to raise coal royalty rates in Australian states triggered the concerns that capital investment in coal assets will shrink further. Investment is already under pressure from the push to divest from coal assets. This acquisition thus helps Japanese steelmakers to secure stable high-quality coking coal resources amid tighter supply expectations and competition from India and Southeast Asia.
Nippon Steel also completed the acquisition of a 20% interest in a steelmaking coal business in Canada from Teck Resources in January (see Kallanish passim). It also has joint venture interests in several Australian coal operations, including Warkworth, Moranbah North, Foxleigh and Coppabella Moorvale. JFE Group has joint venture interests in Byerwen, Sonoma, Moranbah North and Coppabella Moorvale.
Source:Kallanish
