Two major Japanese steelmakers say they will acquire stakes in a coal mine in Australia to secure a stable supply of coking coal for steelmaking over the long term.
Nippon Steel and JFE Holdings announced on Thursday that they have signed the deals worth a total of 1.08 billion US dollars with Whitehaven Coal of Australia.
Nippon Steel says it will invest 720 million dollars to acquire a 20-percent stake in the Blackwater coal mine in Queensland. JFE Holdings says it will invest 360 million dollars to obtain a 10-percent interest in the mine.
The deals come as demand for coal for steelmaking is expected to grow in Southeast Asia and elsewhere. Opening a new mine or expanding existing ones is, however, becoming difficult amid the trend of decarbonization.
The Japanese companies say that since the Australian mine produces high-quality coal with low impurities, they will be able to reduce carbon dioxide emissions in the steelmaking process by using their technologies.
A Nippon Steel executive told an online news conference that the company decided on the investment to secure a stable procurement of materials as well as profits even as market conditions change. He said the company will continue striving to secure quality resources.
A senior official of JFE Steel, a JFE group company, said its decision was made as expanding coal mines is becoming difficult. The official said the company will consider further investment moves if necessary.