JFE Steel Corp. will acquire stake in Australian coal project

JFE Steel Corp. (JFE) will acquire a 20% interest in the Byerwen coal project from QCoal Pty Ltd. The project is expected to start production in 2012 in the northern Bowen Basin of northeastern Queensland, Australia. The two also have agreed to a long-term off-take contract for JFE Steel to take delivery of 2 million tpa of premium hard coking coal to be delivered from the Byerwen coal project.

The proposed open-cast mine will produce 10 million tpa of premium hard coking coal as one of the largest coal mines in Australia. JFE Steel expects that premium hard coking coal from the Byerwen coal project will contribute to the company’s stable and efficient steel works.

Coal from Byerwen will be exported from the port of Abbot Point, which has the capacity to ensure stable, long-term shipments. Also, the geological conditions of the project are considered ideal for open-cut mining and will promote cost-competitive operations.

Amidst predictions of a decline in good-quality coking coal reserves worldwide, the acquisition will enable JFE to increase its ratio of captive coal resources to one of the highest among major steel makers.

JFE will work with QCoal to commence project operations as soon as possible in order to secure its own stable supply of good-quality coking coal over the long term and help stabilize the world’s coking coal market.