Japanese steelmaker Nippon Steel is still committed to take a stake in Teck Resources’ coking coal asset, despite Glencore’s bid for the Canadian miner. Nippon Steel said in February it would spend around 1.15 billion Canadian dollars ($860 million) to buy a 10% stake in Elk Valley Resources Ltd (EVR), the coking coal unit to be spun off from Teck, with a right to raise its stake to maximum 17.5%. But Teck last month withdrew its plan to split its coal and metals business after it failed to receive shareholders’ approval. The company’s board rejected the offer from Glencore and said it will come up with a new simplified plan of separation.

“We are still negotiating with Teck toward making an equity investment in coal assets,” Nippon Steel executive vice president Mori said.

“The amount of our investment may need to be lifted due to Glencore’s bid, but we are determined to take 15% or more stake in the coal asset so that we can make it an affiliate unit,” he added.

Nippon Steel, the world’s fourth largest steelmaker, wants to invest in Teck’s high-quality coking coal to secure a stable supply of the key steelmaking ingredient and to gain profits from the asset, Mori said.

Nippon Steel plans to buy more coking coal and iron ore assets to hedge against volatile raw material prices. Currently, 20% of Nippon Steel’s annual coking coal imports of 27 million tons are supplied by mines in which it holds stakes.

Asked whether Nippon Steel would invest in the coal asset if Glencore buys Teck, Mori said: “there could be a different decision if thermal coal and coking coal are integrated,” underlining a negative implication in terms of climate action.

Steel prices in Asia have been under pressure in recent months due to underwhelming economic recovery in top consumer China.