Photo/Illutration Blackwater coking coal mine in Australia (Provided by Nippon Steel Corp.)

Whitehaven Coal has struck separate deals with Japan's Nippon Steel and JFE Steel to sell stakes of 20% and 10%, respectively, in its Blackwater coking coal mine for a total of $1.08 billion, the Australian miner said on Thursday.

Australia is the top source of the key steel-making ingredient for Japanese steelmakers who have been concerned by a wave of consolidation, as competition grows from India and Indonesia for the higher grade fuel.

Blackwater will be owned by Whitehaven, Nippon Steel and JFE Steel via an unincorporated joint venture, which will be managed by Whitehaven, it said, adding the deals are expected to complete in the first quarter of 2025.

Whitehaven had acquired the Blackwater and Daunia mines from a joint venture of BHP and Japanese trading house Mitsubishi Corp. in a $4.1 billion deal last October.

For Japanese steelmakers, the latest deal will secure high-quality, long-term supplies as coal miners struggle to develop or expand mines due to anti-coal trend aimed at combating climate change.

Japanese trading companies, previously equity investors in coal mines, have been offloading their assets amid the global shift away from fossil fuels.

"We decided to invest to ensure stable raw material procurement and secure earnings even if market conditions change," Ryuichi Nagai, Nippon Steel's managing executive officer, told reporters.

Japan's top steelmaker purchased a stake in Canadian miner Teck Resources's steelmaking coal unit early this year.
"We'll continue striving to secure quality resources," Nagai added, expressing interest in acquiring more stakes in coking coal and iron ore mines if good deals arise.

JFE Steel, the flagship unit of JFE Holdings, may also look to acquire more stakes in coking coal mines, Naohiro Yamauchi, general manager, said in a separate news conference.

"Demand for coke is expected to rise due to growing steel demand in India and Southeast Asia while supply is tightening as developing and expanding coal mines becomes increasingly difficult due to financing challenges," he said.

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