Japan’s Nippon Steel and JFE Steel are set to invest $1.08 billion in Australia’s Blackwater coal mine, aiming to secure a steady supply of high-quality coking coal. Nippon Steel will acquire a 20% stake for $720 million, while JFE Steel will invest $360 million for a 10% share in the Queensland-based open-cut mine.
The investment comes amid growing concerns over the future availability of coking coal, a key raw material in steelmaking. Both companies highlighted the mine’s high-quality coal, which they claim has lower impurities and can reduce carbon emissions during steel production. This move also addresses the increasing difficulty of developing new coal assets, as global coal policies tighten.
Nippon Steel, in particular, expressed urgency due to Australia’s new royalty scheme, which has significantly raised coal taxes. The company sees the investment as part of a broader strategy to stabilize its earnings by increasing control over raw material supplies.
With this acquisition, Nippon Steel will boost its self-sourced coal to 35%, up from the current 30%, further securing its raw material needs amid volatile global markets.
