The Japan Bank for International Cooperation has agreed to help finance the acquisition of a coal mine in Australia by JFE Steel, lending ¥34.2bn (US$240mn) to bolster the supply of coking coal for Japan’s steel industry.

The deal, altogether worth ¥57bn (US$400mn), is being co-financed by Mizuho, MUFG and SMBC.

The Australian subsidiary of JFE Steel, one of Japan’s largest steelmakers, will use the proceeds to acquire a participation interest in the Blackwater coal mine project in Queensland, eastern Australia.

In an statement, JBIC says funding will bolster coking coal imports for Japanese producers.

“The loan supports JFE Steel in acquiring the participation interest of high-quality coking coal, which is an important mineral for Japanese companies and enhances the supply chains in the steel and iron industry,” it notes.

JBIC, a state export finance institution, has provided billions of dollars for LNG and metals imports in recent years. Last month, it approved a US$466mn facility to boost copper imports from Chile.

JFE is taking a “multitrack approach” to achieve carbon neutrality by 2050, accelerating its development of innovative steelmaking technologies, JBIC says.

Export credit agencies have largely swung away from coal since 2015, when restrictions were adopted by members of the OECD Arrangement on Officially Supported Export Credits. After limitations were tightened in 2021, Japan and Korea stopped funding coal-fired power in emerging countries.

Nonetheless, OECD Arrangement members have not fully divested from all aspects of coal supply chains – mining is still eligible for support – and there are signs of renewed interest in the sector.

Last week, US President Donald Trump directed the Export-Import Bank of the United States to remove barriers to coal development.