Nippon Oil, Nippon Steel to develop new coal mineadmin
Thursday, August 31st 2006
Japan’s top refiner Nippon Oil Corp. and steel maker Nippon Steel Corp. said on Thursday their Australian joint venture with Xstrata would invest about $255 million to develop a new coal mine at its Bulga mine. The new Blakefield Block will start producing coal in late 2009 and will eventually produce coal at a rate of about 5 million tonnes a year, the Japanese companies said in separate statements. Development of the block is slated to start in 2007.
The new block will replace the venture’s Beltana mine, which is currently producing 5 million tonnes of coal a year, but is expected to be depleted by 2009. The joint venture’s output will as a result stay flat at 10 million tonnes after 2009.
Nippon Oil now sells 6 million tonnes per year of coal produced from the joint venture, mainly to Japanese electric power companies.
Zurich-based mining group Xstrata, Nippon Oil and Nippon Steel, among others, will shoulder the total 30 billion yen ($256 million) investment for the Blakefield Block in accordance with their investment ratios in the venture.
Xstrata owns 68 percent of the company, while Nippon Oil and Nippon Steel have 13.3 percent and 12.5 percent stakes respectively.
Nippon Steel said the investment is part of its efforts to increase the stable acquisition of its raw materials.