Japan's largest steelmaker Nippon Steel Corporation (NSC) has announced that it will acquire a 23.3 percent economic interest in the Revuboe coking coal project in Mozambique, aiming to strengthen its metallurgical coal procurement base.
The purchase agreement was reached with its affiliate company Nippon Steel Trading Co, which currently holds a 33.3 percent interest in the project.
The Revuboe coking coal project in Mozambique will also be jointly developed with South Korea's largest steelmaker POSCO, which owns 7.8 percent in the project, and with investment company Talbot Group Holdings Ltd, which owns the remainder.
The feasibility study for the project, which will cost between $500 million and $600 million to develop, is to be completed by the end of 2011, with production to start in 2014 or 2015.
Of the five million mt per year of hard coking coal expected to be produced at the mine in Mozambique, Nippon Steel will have access to about 1.7 million mt, Toshiharu Sakae, an executive at the company's raw materials division, said at a briefing. The supply will increase the steelmaker's self-sufficiency in coal to 30 percent from the current 25 percent.