JFE Shoji Gets 5% Interest in Sonoma Coal Mine

JFE Shoji Trade announced on Thursday the firm decided to invest in Sonoma coal project led by Q Coal of Australia. The firm acquires 5% interest in the project, which will produce annual 4 million tonnes of coal starting October-December, for around 1.4 billion yen. The firm secures annual 500,000 tonnes of hard coking coal for JFE Steel. JFE Shoji will sell the coal to third countries with the agency for the coking coal. The firm tries to support stable procurement of JFE Steel along with the higher trading of coal. Sonoma located in Queensland of Australia is open cut mine with 70 million tonnes of reserve. The mine is 105 kilometers away from Abbot Point port. The mine will produce averaged 3.4 million tonnes per month through the 14 years operation and produces 4 million tonnes in the peak in 2008 and 2009. The thermal coal output represents more than half of the production. JFE Steel will sign long term purchase agreement with the project to buy annual 500,000 tonnes of coking coal. The firm increases the procurement of coking coal from mines with group’s interest to more than 10% of 24-25 million tonnes of purchase volume. The firm tries to increase the purchase from captive source to 20-30%. JFE Shoji has interests in Australian coal mines including 1.8% interest in Integra mine, 2.5% interest in Carborough Downs, 3.7% in Coppabella and 1.83% in Oakbridge. The firm tries to seek opportunity to invest in competitive coking coal mines.