* Mitsubishi to sell stake in 2 thermal coal mines in
* Mitsubishi may sell stake in another thermal coal mine
* Mitsui, Sojitz to cut thermal coal exposure
By Yuka Obayashi
TOKYO, June 13 Japanese trading houses including
top-ranked Mitsubishi Corp are offloading thermal coal
assets on growing concerns about the fuel's environmental
impact, in a move also reflecting a shift in their focus to the
more profitable coking coal.
With networks spanning the globe, trading houses are trying
to mitigate global criticism around the harm the fuel causes.
Japan, which had to burn record amounts of the dirtiest fossil
fuel to generate power after the Fukushima disaster in 2011
paralysed its nuclear sector, seeks to slash its carbon
emissions by 26 percent by 2030 from 2013 levels.
Among recent thermal coal asset sales by Japanese trading
houses is Mitsubishi's decision to offload its minority stakes
in Hunter Valley Operations and Warkworth mine in Australia,
tagging along with Rio Tinto's sale of those
Last week, miner-trader Glencore said it had
offered $2.55 billion cash for the Rio mines, outbidding an
offer from Chinese-owned Yancoal.
"We've decided to sell ... to whichever of the two bidders
wins the bid," Mitsubishi said on Tuesday.
Yancoal has offered to buy Mitsubishi's stakes for $940
million, while Glencore has offered $920 million cash.
Mitsubishi is also considering selling a stake in the
Clermont coal mine in Australia. If sold, the company would be
left with a stake in one thermal coal mine.
"It makes sense to sell thermal coal assets as they generate
lower profit than coking coal and given global environmental
pressure to shift away from coal, but a key question is whether
Mitsubishi could buy better assets at low price," said Nomura
Securities senior analyst Yasuhiro Narita.
After posting its first ever annual loss in the year to
March 2016 due to a commodity slump, Mitsubishi has been
reshuffling its natural resources portfolio to focus on three
core assets: coking coal, copper, and liquefied natural gas
Other Japanese trading houses have also been cutting or
freezing investments in thermal coal.
Last month, Mitsui & Co said it would invest mainly
in iron ore, LNG and oil and had no plans to invest in new
thermal coal mines amid environmental concerns.
In 2016, Mitsui said it planned to cut its exposure to coal
by a third within three years.
Sojitz is also limiting investment in coal.
"We'll continue to seek opportunities to cut some of our
thermal coal assets and raise our coking coal exposure," Sojitz
President Yoji Sato has said, adding that a recovery in thermal
coal prices provides a good opportunity to sell stakes in
low-quality coal mines.
Thermal coal prices more than doubled from
January 2016 to a peak of $109.69 a tonne in November, but have
since retreated to $80.79. Coking coal, used to make steel, is
currently priced at around $146 per tonne.
(Reporting by Yuka Obayashi; Editing by Himani Sarkar)