JFE Shoji Acquires Equity in Australian 2 Coal Mines

JFE Shoji Corporation announced on Wednesday the firm acquired all shares of Australian coal developer, Republic Coal from resource investment company, Three Cheeky Monkeys Holdings of Australia. JFE Shoji acquired coal interests in operating mine and undeveloped mine in Queensland. The firm pays near 15 billion yen including the development of the mine, which was the largest mineral resource investment for the firm. The firm sells the coal including pulverized coal injection coal to JFE Steel and other users. The firm tries to expand coal and resource investment with cooperation with JFE Steel, which targets 30% of equity coal rate for the requirement.

JFE Shoji acquired 37.5% share in Baralaba coal mine with 750,000 tonnes of annual production of PCI coal and thermal coal and 20% share in the adjacent mine, Wonbindi. The firm starts discussion with Australian coal developer, Cockatoo Coal, which has remaining share in the 2 mines, to start operation of Wonbindi mine at annual 2-3.5 million tonnes in 2014.

JFE Shoji’s equity coal increases from annual 500,000 tonnes to around 800,000 tonnes through the acquisition. After start of Wonbindi and end of operation of Baralaba, the equity increases to 1.2 million tonnes level. With the higher equity coal, the firm tries to expand coal sales to JFE Steel and other users in offshore countries.

JFE Steel group’s equity coal rate increases from 15% of the requirement to 18% through JFE Shoji’s acquisition. JFE Steel targets to secure 30% of the equity coal in around 2 years. The group tires to secure coal assets through JFE Shoji’s effort to get PCI coal with thermal coal marketing activity while JFE Steel tries to get coking coal equity.