JFE Steel to acquire 20% interest in Byerwen Coal project
JFE Steel Corporation will acquire a 20% interest in the Byerwen Coal project from QCoal Pty Ltd, which is expected to start production in 2012 in the northern Bowen Basin of northeastern Queensland, Australia.
The two have also agreed to a long-term off-take contract for JFE steel to take annual delivery of 2.0 mt of premium hard coking coal to be delivered from the Byerwen Coal project.
The proposed open-cut mine will produce 10 mtpa 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 highly contribute to the company’s stable and efficient steel works.
The port of Abbot Point serving the Byerwen Coal project has great 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.
Amid predictions of a decline in good-quality coking coal reserves worldwide, the acquisition will enable JFE steel to increase its ratio of captive coal resources to one of the highest among major steel makers.
JFE Steel says that it 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 stabilise the world’s coking coal market.
