Japan’s two largest steelmakers have taken a billion-dollar stake in a central Queensland coal mine to ensure supply, stating current coal royalty policies were threatening future investment in the sector.
Nippon Steel and JFE Steel will together secure 30 percent of the Blackwater metallurgical coal mine in a $1.6 billion deal with Whitehaven Coal.
In a statement, Japan’s largest steelmaker Nippon Steel said there were growing concerns capital investment in coal assets would shrink due to policies of raising coal royalty rates in Australian states, like Queensland.
It said this would “hold significant influence over the supply of steelmaking coal to the seaborne market (and) contribute to a decrease in the supply of steelmaking coal in the long term”.
“Given the strong sense of urgency in respect to this decrease in the supply of steelmaking coal, Nippon Steel has determined that, as an end-user of steelmaking coal, it is necessary to invest in the BW Coal Mine to secure a long-term stable supply of coking coal required for Nippon Steel’s technologically advanced coke production,” the statement said.
JFE Steel Australia Resources Managing Director Toshinari Takahashi said Japan’s second-largest steel producer would take a 10 percent stake in the mine, valued at more than $530 million.
“The Blackwater joint venture will ensure JFE Steel has a reliable supply of metallurgical coal to support steel production which is vital for economic growth and the development of energy infrastructure for a net-zero future,” Mr Takahashi.
He said JFE, which also has joint-venture interests in several other Australian coal operations, including Byerwen, Sonoma, Moranbah North and Coppabella Moorvale, had been committed to Australia as a key trading partner since the 1960s and had a long-standing investment in Queensland’s resources sector for close to 30 years.
The Blackwater open cut mine is one of the largest metallurgical coal mines in Queensland and is situated 73km south-east of Emerald in Central Queensland’s Bowen Basin.
Mr Takahashi said with a measured and indicated resource volume over 800 million tonnes, the mine was expected to continue to provide a stable, long-term supply of high-quality coking coal for steelmaking.
