Nippon Steel nears Mozambique deal

JIJI

Nippon Steel Corp. is in final talks with the government of Mozambique to close a deal that will give the steelmaker development rights to a coal mine in the country, it was learned Monday.

The concession to the Revuboe project will secure the company a stable supply of coking coal, which remains expensive.

After obtaining the rights, Nippon Steel will begin building mining facilities there to start production of coking coal in 2014 or 2015. The project is expected to help Nippon Steel secure about 7 percent of its annual coking coal needs, totaling about 20 million tons.

The move is part of the company’s efforts to raise procurement of coking coal from its own mines to 50 percent in the medium term from 30 percent.

Minister of Economy, Trade and Industry Yukio Edano is preparing to visit Mozambique this fall as part of the government’s effort to support coal mine development overseas.

Nippon Steel might also team up with Vale SA, a Brazilian mining energy giant, and others to build infrastructure in the African nation to export coking coal from the Revuboe project.

A railway linking the mine and Nacala, a port city in the north of the country, is already under consideration.