Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japan-based steelmaker Nippon Steel has agreed to acquire mining interests in Grosvenor coal mine, Australia in partnership with other Japanese companies to secure coal supplies for its plants in that country. 

 

Leading mining group Anglo American plans to sell 12pc stake in its coking coal operations at Grosvenor in Queensland to a group of Japanese partners including Nippon Steel Corporation, Mitsui & Co, Shinsho and JFE Mineral for around $141mn in cash. Accordingly Nippon Steel entered an agreement to acquire 5pc mining interests in the mine for AUD86.4mn (approximately $58.4mn or JPY6.6bn) through its Australian subsidiary. Nippon Steel aims to secure medium and long-term stability in terms of raw-materials prices through this deal. 

 

Davis learnt that Grosvenor coal mine produces high quality coking coal at competitive cost and is adjacent to Moranbah North Coal Mine with which it shares surface facilities. Nippon Steel also has 5pc mining interest in Moranbah North Coal Mine in partnership with Anglo American and other Japanese companies. The proximity of both the mines will provide the company synergies of cost and scale.

 

Nippon Steel’s plant suffered losses of about 400,000mt of crude steel production in fiscal 2019 (April 2019 to March 2020) as a result of stoppages at Kimitsu works and Nisshin’s Kure works caused by typhoons. Production at No.1 plant with 150,000 mt/year capacity at Kimitsu was suspended after a chimney of its gas-treating facility collapsed due to Typhoon Faxai on Sept 9.

 

(Conversion rate: 1 USD = 109.428 JPY, 1 USD = 1.47814 AUD

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