JX Nippon Oil and Energy Corporation, a subsidiary of JX, has acquired a 25% interest in Xstrata Coal British Columbia (XCBC), Xstrata's Canadian coking coal operations for $435m in cash.
The acquisition will create a joint venture comprising contiguous metallurgical coal assets in the Peace River Coalfields in Western Canada.
Xstrata Coal will retain a 75% interest in the joint venture and will develop, operate and manage the assets while JX will be the exclusive marketing agent for First Coal and Sukunka coal sold into Japan.
XCBC comprises a 100% interest in the metallurgical coal assets which include First Coal Corporation tenements, representing over 100,000ha of contiguous coal licenses and applications and the Lossan coal deposit.
The Sukunka and Suska project coal deposit which have the potential to produce about 9.5 million tonnes per annum.
The majority of this production is expected to comprise hard coking coal with the balance expected to be PCI coal.
JX Nippon stated the deal enables its entry into the hard coking coal market.