The Competition Commission of India (CCI) has approved the acquisition of a collective 30% stake in the Blackwater Coal Mine, located in Queensland, Australia, by NS Blackwater Pty Limited and JFE Steel Australia (BW) Pty Ltd.
The approval paves the way for Nippon Steel Corporation and JFE Holdings, Inc. to strengthen their coking coal supply agreements through their respective special purpose vehicles.
Details of the Acquisition
The proposed transaction involves NS Blackwater Pty Limited acquiring a 20% stake and JFE Steel Australia (BW) Pty Ltd acquiring a 10% stake in the Blackwater Coal Mine, The Economic Times reported. NS Blackwater is a newly established special purpose vehicle ultimately owned by Nippon Steel Corporation, whereas JFE Steel Australia (BW) Pty Ltd is a special purpose vehicle wholly owned by JFE Holdings, Inc.
Blackwater Coal Mine, an open-cut coal mine in Queensland, has been operational since 1967 and is a key supplier of coking coal, particularly to the Indian market through imports. The acquisition is expected to bolster the long-term coal supply agreements of both Nippon Steel and JFE Steel.
Strategic Importance of the Acquisition
In August 2024, JFE Steel announced its agreement with Whitehaven Coal, an Australian supplier of coking coal, to acquire a 10% interest in the Blackwater Coal Mine along with a long-term offtake agreement to secure coal supply. Similarly, Nippon Steel entered into an equity participation agreement with Whitehaven Coal to acquire a 20% stake, reinforcing its coal offtake rights with Whitehaven Coal Ltd (WHC) to secure a steady supply of steelmaking coal.
Regulatory Oversight and Fair Competition
As per Indian regulatory requirements, mergers and acquisitions that exceed a certain threshold necessitate approval from the CCI to ensure compliance with fair competition practices. The CCI plays a crucial role in overseeing such transactions to prevent anti-competitive behavior and maintain market fairness.
