Fair trade regulator CCI on Tuesday said it has approved a proposal of Japanese steelmakers Nippon Steel and JFE Steel to collectively acquire a 30% stake in Queensland's Blackwater coal mine. "The proposed combination envisages the acquisition of 20% and 10% interest in Blackwater Coal Mine by NS Blackwater Pty Ltd and JFE Steel Australia Pty Ltd., respectively," the Competition Commission of India said in a release.
NS Blackwater is a special purpose vehicle and is ultimately owned by Nippon Steel Corp., while JFE Steel Australia Pty is owned by JFE Holdings, Inc.
JFE Steel Corporation, one of the world's leading integrated steel producers, was established through the consolidation of NKK Corp. and Kawasaki Steel Corp. in 2003.
Blackwater Coal Mine (BW Coal Mine) is an open-cut mine in Queensland, Australia, which has been operating since 1967. In India, the BW Coal Mine supplies coking coal by way of imports.
In August last year, JFE Steel said that it has signed an agreement with Whitehaven Coal, an Australian supplier of coking coal for steelmaking, to acquire a 10% interest in the Blackwater coal mine, along with a long-term offtake agreement for coal supply from the mine.
Similarly, Nippon Steel said that it had entered into an equity participation agreement with Whitehaven Coal to acquire a 20% stake in the Blackwater coal mine.
In addition, Nippon Steel has entered into long-term coal offtake rights agreement with Whitehaven Coal Ltd., under which WHC will supply steelmaking coal produced at the BW Coal Mine to Nippon Steel.
Deals beyond a certain threshold require approval from the regulator, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.
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