Nippon Steel is looking to buy more stakes in coking coal mines to secure a stable supply of the key steel-making ingredient, its executive said.
Japan’s steelmaker already owns stakes in several coking coal mines and iron ore mines, procuring about 20% of the 27 million tons of its annual import of coking coal and the 58 million tons in iron ore import from those holdings.
“It’s not necessary to stop at the 20%,” said executive vice president Takahiro Mori.
“We are considering raising the self-sufficient ratio by buying interests in raw materials (assets) that are meaningful in our strategy, high-quality and economical,” he said.
For the steelmaker, a more urgent need is to invest in coking coal mines than iron ore projects, Mori said, as Western sanctions on Russia over the invasion of Ukraine have squeezed an already-tight supply of commodities such as metallurgical coal.
Iron ore prices are expected to move in line with steel demand, but coking coal prices will likely stay high due to higher thermal coal prices and falling investment in new coal mines in the global efforts to tackle climate change, Mori said.
“The hurdles for mining investment have risen considerably due to the global decarbonization trend, but a certain amount of coking coal will be needed to produce steel even after carbon neutrality is achieved in 2050,” he said.
Nippon Steel has no plan to invest in thermal coal mines, Mori said.