Nippon Steel to Invest in Major Canadian Resources Company
Tokyo, Feb. 22 (Jiji Press)--Japan's Nippon Steel Corp. <5401> said it will invest 1.15 billion Canadian dollars to acquire a 10 pct equity stake in Elk Valley Resources Ltd., a steelmaking coal company to be set up in Vancouver as a spinoff by major Canadian miner Teck Resources Ltd.
It will be Nippon Steel's largest investment ever in steelmaking coal interests.
The move, announced on Tuesday, will allow the Japanese steelmaker to stably procure on a long-term basis high-quality process raw coal for steelmaking to be produced by Elk Valley. Nippon Steel also aims to strengthen its earnings in the raw materials business.
The investment is expected to be completed in the April-June quarter.
Nippon Steel will appoint a board member of Elk Valley. The Japanese company will also acquire the right to increase its stake in Elk Valley up to 17.5 pct after the Canadian firm goes public.
[Copyright The Jiji Press, Ltd.]