Coal procurement from China for Nippon, Posco & Baosteel
Japanese steel maker Nippon Steel Corporation is in talks with other major producers South Korean POSCO, Chinese Shanghai
Baosteel Group and Japanese
trading house Mitsui & Co., according to latest reports from the industry.
These companies together intend to secure supplies of high quality coal that they need for high quality steel
production, at lower costs and therefore are in negotiations with major coal mines in
China and Shanxi Province.
An investment of about $450 million is intended to be made on the project for developing coal fields in
China. There is no exact date for initialising
production, and the main handicap currently appears to be strict rules against foreign capital in
China. However, to supply coal from closer regions will help reduce the costs of these producers. Currently coal imports mainly come from
Australia and
Canada however supplies from
China have increased recently accounting for around 10% of total imports.
In case of the project can be actualised, the three steel making companies aim to use the coal in their steel
production, and the
trading house Mitsui's role to be shippers. It is believed that this project will help to increase their competitiveness in international markets.