JX Nippon Oil & Energy paid $435 million to acquire a 25% interest in Xstrata Coal British Columbia (XCBC), which will create a joint venture comprising contiguous metallurgical coal assets in the Peace River coalfields in Western Canada.
XCBC owns the First Coal Corp. leases, acquired by Xstrata Coal in August 2011, representing more than 100,000 hectares of contiguous coal licenses and applications; the Lossan coal deposit acquired by Xstrata Coal in October 2011; and the Sukunka coal deposit, the acquisition of which was announced March 8, 2012. Xstrata Coal will develop, operate and manage the assets on behalf of the joint venture. In addition to its 25% interest, JX Nippon will be the exclusive marketing agent for First Coal and Sukunka coal sold into Japan.
“JX and Xstrata Coal have built a strong relationship over the years via our Oakbridge joint venture in Australia,” said Yasushi Kimura, president, JX Nippon. “This opportunity has great significance for JX as it marks our entry into the hard coking coal market.”
Technical studies indicate the two most advanced XCBC projects, Sukunka and Suska, have the potential to produce up to approximately 9.5 million metric tons (mt) per year.
Sukunka has an NI 43-101 compliant coal resource of 236 million mt in the measured and indicated categories. Norwest has completed a pre-feasibility study for a longwall mine producing hard coking coal.