Australia’s Whitehaven Coal has sold a 20% stake in the Blackwater mine to Nippon Steel Corp. and a 10% stake to JFE Steel Corp. for $1.08 billion. The transactions are expected to be completed in Q1 2025, subject to customary competition and regulatory approvals. Upon completion, Blackwater will be owned by Whitehaven, Nippon Steel and JFE Steel via an unincorporated joint venture and Whitehaven will manage the joint venture.
“We are delighted to welcome Nippon Steel and JFE Steel as joint venture partners at Blackwater,” said Paul Flynn, managing director and CEO of Whitehaven. “Both companies have a long and proud tradition of excellence in steel production and have contributed to the economic advancement of Japan and the region more broadly.”
Nippon Steel and JFE Steel are long-term consumers of metallurgical coal from the Blackwater mine. As part of the joint venture arrangements, Whitehaven has entered into separate offtake agreements with Nippon Steel and JFE Steel, which consider their equity interests and historical consumption of Blackwater products. The offtake agreements include market-based pricing mechanisms.
“Having a secure supply of high quality coking coal supports us to stabilize profits and build a more resilient Nippon Steel, fully utilizing our technological advantages,” said Takashi Hirose, representative director and executive vice president at Nippon Steel.
Whitehaven recently purchased the Blackwater and Daunia mines from BHP. The company’s net debt as of June 30, 2024, was A$1.3 billion ($871 million). The company said that Nippon Steel and JFE Steel are strongly aligned with it as far as unlocking further value at Blackwater, a critical supplier of seaborne metallurgical coal.
“JFE has been committed to Australia as a key trading partner since the 1960s with long standing investments in Queensland’s resources sector for close to 30 years,” said Hiroyuki Ogawa, executive vice president of JFE Steel. “As a long-term user of Blackwater’s steelmaking coal, we are pleased to enter a strategic joint venture with Whitehaven.”
The Blackwater coal mine is an open-cut mine that lies 73 km southeast of Emerald in Queensland and in recent years has been producing around 12-13 million metric tons per year of raw coal, with opportunities to produce higher volumes. It is one of the largest coal mines in Australia, with a strike length of 80 km, and has the largest dragline fleet (7) in the Southern Hemisphere. Both hard coking coal and semi soft coking coal products are mined at Blackwater. Blackwater’s remaining life of mine could extend beyond 50 years. The coal is exported through the RG Tanna Terminal north of Gladstone.
