Sumitomo says its purchase of 50 per cent of the Isaac Plains mine in Queensland for $430 million from Aquila Resources is the coking coal investment it was looking for.
Sumitomo will extract and sell Isaac Plains coal together with Vale, which owns the other half of the mine, according to a Sumitomo spokesman.
“We have been seeking a good investment opportunity in coking coal” to meet expected strong demand from Asia, the Sumitomo spokesman said.
Sumitomo also got exploration rights to Aquila coal blocks in Queensland.
Aquila needed a partner to contribute to exploration costs as it expanded, the Sumitomo spokesman added.
Isaac Plains produces 2.8 million tonnes of coal a year, 70 per cent of which is coking coal.