Nippon Steel Corporation and JFE Steel Corporation, two leading global steelmakers, have approached the Competition Commission of India (CCI) for approval to acquire stakes in Queensland’s Blackwater Coal Mine. These transactions, aimed at strengthening access to coking coal, are crucial for steel production and are positioned as strategic investments. Nippon Steel plans to acquire a 20% interest in the mine with coal offtake rights, while JFE Steel intends to take a 10% stake with similar rights. Both acquisitions are independent but strategically aligned to ensure supply chain reliability.
As outlined in their filing under Regulation 13(2) of the CCI’s Combination Regulations, the transactions are referred to as the “Proposed Nippon Transaction” and “Proposed JFE Transaction.” Special purpose vehicles — NS Blackwater Pty Limited for Nippon Steel and JFE Steel Australia (BW) Pty Ltd. for JFE Steel — have been established to facilitate these acquisitions. Operational since 1967, the Blackwater Coal Mine is a significant global supplier of coking coal, an essential raw material for steel manufacturing, including imports into India for domestic consumption.
Nippon Steel operates manufacturing facilities across Japan and 15 other countries, with its Indian operations focusing on automotive steel sheets, pipes, and tubes for the construction and automotive sectors. JFE Steel, another global leader, engages in steel production, engineering, and trading through its affiliates. Both companies aim to leverage this acquisition to enhance their supply chains and ensure consistent access to high-quality coking coal for their global operations.
The filing assures the CCI that these transactions will not result in adverse effects on competition in India, citing their limited market shares in the relevant coal and steel markets. With strong competition among domestic coal producers and importers, the acquisitions are unlikely to disrupt the competitive landscape. For India’s expanding steel industry, securing reliable raw material sources like coking coal is a strategic priority, making these acquisitions vital for both Nippon Steel and JFE Steel as they strengthen their positions in a rapidly growing market.
