On December 17, Japanese steelmaker JFE Steel Corporation (JFE) announced that it will acquire a 20 percent interest in the Byerwen Coal project from Brisbane-based QCoal Pty Ltd, which is expected to start production in 2012 in the northern Bowen Basin of northeastern Queensland, Australia. The two companies have also agreed to a long-term off-take contract for JFE steel to take annual delivery of 2 million metric tons of premium hard coking coal to be delivered from the Byerwen Coal project.
The proposed open cut mine will produce 10 million metric tons of premium hard coking coal per annum as one of the largest coal mines in Australia. JFE Steel expects that premium hard coking coal from the Byerwen Coal project will greatly contribute to the stability and efficiency of the company's steel works.
In addition, 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.
Morover, amidst 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 steelmakers.