Nippon Steel Corp, Japan’s largest steelmaker, is to pursue investments in iron ore and coal mines, joining rivals in a bid to curb costs and secure supplies of key steelmaking ingredients.
The company wants to supply 50% of its raw material needs by buying stakes in mines or developing new ones.
Mines partly owned by the mill supply 35% of its iron ore and 25% of its coking coal needs.
Nippon Steel, Posco and ArcelorMittal are scouring the world for resources as prices rise. BHP Billiton recently won a 55% price increase from Tokyo-based JFE Holdings for a three month contract from April 1.
Essar Grouyp said its purchase of Trinity Coal Corp, the Indian company’s first overseas coal mine acquisition, will help lock-in raw materials.
A group involving Nippon Steel, Japan’s four other largest blast furnace mills and Itochu Corp agreed in 2008 to buy 40% of Brazilian ore producer Nacional Minerios (Namisa) for $3.12bn.