China’s Baowu will try to sell its remaining Queensland coal assets after closing a disastrous contract that forced it to pay for unused port capacity
China’s biggest state-owned steelmaker, Baowu, has taken a big step towards exiting the Queensland coking coal sector, shelling out close to $300 million to settle a disastrous deal that forced it to pay for port and rail capacity it has never used.Coal Export Terminal clears the way for Baowu to push ahead with efforts to sell its stake in the Eagle Downs coking coal mine that was intended to fill the WICET port capacity.its 50 per cent stake in Eagle Downs for more than two years.
The WICET contract was set to cost the Aquila partners a further $375.9 million over the remaining life of the contract, prompting them to seek an early exit. But the WICET settlement does not entirely resolve the mine’s take-or-pay problems; Aquila still has $162 million of take-or-pay electricity and water obligations to meet between now and 2040.
Baowu mostly operates blast furnace steel mills in China, which use coking coal to strip away the oxygen in iron ore when making steel.to reduce its reliance on coking coal as part of efforts to cut carbon emissions.
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