Mitsui, Itochu plan coal mines exit

Coal Insights Bureau

Several Japanese conglomerates like Mitsui and Itochu are selling off their coal mine assets across the globe.

This comes at a time when around 90 Japanese companies have called on the Japanese government to raise the share of renewable power in the overall energy mix by 2030.

Itochu charts exit strategy

Itochu, which holds interests in five coal projects in Australia, has announced its exit from thermal coal assets as part of its medium-term plan, which will be effective till 2024.

The strategy talked of “promoting decarbonisation by fully divesting from thermal coal mining assets”.

The coal mine projects include: Whitehaven Coal-managed Maules Creek mine; 10 percent interest in the Glencoremanaged Ravensworth thermal and coking coal project, 12.5 percent stake in Wandoan thermal coal joint venture project with Glencore and SCAP Wandoan in Queensland.

Mitsui to exit Mozambique coal mine project

Mitsui & Co. Ltd and Vale SA have been engaged in the Moatize coal mine project in Mozambique and the Nacala Corridor rail & port infrastructure project.

On January 20, Mitsui and Vale entered into an agreement to transfer all of Mitsui’s interest in the projects and associated loans to Vale, the operator of the projects, for just $1 each.

“Mitsui is currently reviewing the anticipated loss that will result from the transfer,” the Japanese conglomerate said.

Vale to divest jointly held mine

In March 2017, Mitsui acquired, from Vale, a 15 percent equity interest in a Vale subsidiary that owns 95 percent interest of the Moatize Project, and 50 percent equity in another Vale subsidiary that is implementing the Nacala Project.

Since then, Mitsui worked to develop the projects and improve their operations. However, Vale made a decision to divest its coal business to concentrate on its core activities.

In response, Mitsui decided to sell its equity stake to Vale in the context of reorganisation and restructuring of the asset portfolio.

Vale will continue to operate the projects after their acquisition of Mitsui’s interest, and will ultimately consider divestment of their interest to a third party.

“Following the acquisition of Mitsui’s stakes and, hence, the governance and asset management simplification, Vale will begin the process of divesting its participation in the coal business, which will be guided by the preservation of the operational continuity of the Moatize mine and the NLC, through the search for a third party interested in those assets,” Vale said in a release.

“The HoA signing, as an initial step towards Vale’s divestment from the coal business, is in line with its discipline in capital allocation and the simplification of the Company’s portfolio, and reinforces its commitment to the Paris Agreement, as well as Vale’s ambition to become a leader in low carbon mining “ Vale said.

Japan Climate Initiative targets up to 50% RE share by 2030

On January 18, the 90-member Japan Climate Initiative (JCI) member companies called on the Japanese government to raise its renewable energy share to 40-50 percent in its 2030 electricity mix.

JCI counts noted Japanese entities like Sony, Nippon Electric, Hitachi, Ajinomoto and Nomura among others as its members.

To meet the goal of being carbon neutral by 2050, EU countries and US states have already set progressive goals to be reached by 2030, in the range of 40-74 percent in the electricity mix.

In contrast, Japan’s current renewable energy target for 2030 is only 22-24 percent.

This message calling on the Japanese government to raise its 2030 renewable energy target was endorsed by leading Japanese corporations.