- Company to bolster supply for 'carbon neutral' steelmaking
According to Nikkei Asia article published on February 22, 2023, Nippon Steel will invest in Canadian mining company Teck Resources' coking coal business, aiming to procure high-quality coal for a steelmaking process that limits the environmental impact.
Nippon Steel will pay around 1.15 billion Canadian dollars ($850 million) to acquire a 10% stake in Elk Valley Resources, which will be spun off from Teck as a coking coal business operator and listed on the Toronto Stock Exchange.
"We are striving for stable procurement of high-quality coking coal, which is indispensable for the carbon-neutral production of steel," said Takashi Hirose, a Nippon Steel executive vice president, in an online news conference. The move is said to be one of the company's largest-ever investments in raw materials.
In addition to acquiring 10% each of EVR's common and preferred stock, Nippon Steel may also consider making it an equity affiliate in the future. EVR has an annual production capacity of 25 million to 27 million tonnes.
Nippon Steel will shore up its supply of high-quality coking coal with this investment. The company aims to commercialize a technology to produce iron by injecting hydrogen into the blast furnace and sees high-quality coking coal as necessary in a decarbonized era.
Nippon Steel has acquired interests in coking coal in Australia and elsewhere. It has plans to produce direct reduced iron for use in electric furnaces, which emit less carbon dioxide than traditional blast furnaces.
The steel industry is a major emitter of CO2, accounting for 40% or so of the Japanese industrial sector's emissions. A large amount of CO2 is emitted when iron ore is reduced with coking coal in a blast furnace. Using high-quality coal makes the reduction process more efficient, meaning that less coal is used.
