Posted on 24 Mar 2015
Nippon Steel & Sumitomo Metal Corp, Japan's top steelmaker, has signed a contract with Idemitsu Kosan Co Ltd to buy a 10 percent stake in its Boggabri coal mine in Australia, the companies said on Monday without disclosing the value of the deal.
The pact follows a similar sale of 10 percent stake in the mine by Idemitsu to Japanese utility Chugoku Electric Power Co last year. Nippon Steel also signed a long-term coal purchase agreement to buy coal from the mine, located in New South Wales, but both companies declined to comment on details of the contract. The Boggabri coal mine produced 5.6 million tonnes of thermal coal and coking coal in 2014 and it is in the process of raising output to 7 million tonnes a year by the end of June, an Idemitsu spokeswoman said. Having two Japanese major customers in utilities and steel industries as long-term buyers will lead to a stable operations of the mine, she said. Nippon Steel, which also sells electric power as independent power producers (IPP), has decided to buy a stake as the Boggabri mine supplies high-quality thermal and coking coal and the stake will help it secure a stable source of raw materials on a long term, a spokesman said.
