Nippon Steel will invest more in iron ore and coal mines to reduce costs and secure supplies of steelmaking ingredients.
Nippon Steel executive vice-president Shinichi Taniguchi said the company wants to secure half of its raw material needs by buying stakes in mines or developing new mines.
“We have to defend ourselves by increasing the proportion of the materials we secure from our own sources,” Taniguchi told Bloomberg.
Nippon’s agreed investment in Brazilian iron ore producer Namisa is expected to help increase the ratio of its ore procurement to more than 40% when the firm completes its expansion in 2013.
Namisa’s annual iron ore output is slated to increase to 38 million tons from the 18 million tons forecast for 2009, writes Bloomberg.
Nippon Steel’s other investment in mines include the Rio Tinto-led Robe River iron ore venture and the Warkworth coal mine in Australia, as well as Vale’s Nibrasco iron-ore project in Brazil.
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The company’s partly owned mines supply 35% of its iron ore and 25% of its coking coal needs.