Loan for Coking Coal Mine Development Project by ITOCHU Corporation’s US Subsidiary
Contributing to Securing Mineral Resources by Japanese Company
- Region: North America
- Energy and Natural Resources
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on March 8 a loan agreement amounting to up to USD56 million (JBIC portion) with ITC-NCR, LLC (ITC-NCR), a US company wholly owned by ITOCHU Corporation (ITOCHU), for the development of the Longview coking coal mine located in the State of West Virginia in the United States. The loan is co-financed with a private financial institution, bringing the total co-financing amount to USD80 million.
The loan is intended to provide the long-term capital required for ITC-NCR to develop the Longview coking coal mine through investment in North Central Resources, LLC, a US company of which ITC-NCR has been a shareholder since FY2019. The mine is being developed toward the commencement of commercial production at the end of 2022, and its annual production capacity is expected to be 4 million tons, which would make it one of the largest coking coal mines in the United States.
While coking coal is an essential raw material for making steel, global reserves are limited. Thus, it is a challenge to secure the necessary amounts of coking coal at appropriate prices. Similar to existing mines in the neighboring areas, the new mine being developed under the project is expected to produce high-quality coking coal that is compatible with Japanese blast furnaces. Furthermore, the United States has been steadily supplying coal to Japan for many years, and this project has major significance for Japan in terms of efforts to secure a stable supply of coking coal.
As Japan’s policy-based financial institution, JBIC will continue to provide financial support to projects that contribute toward securing important resources for Japan by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.