French energy group EDF's trading subsidiary EDF Trading has signed a non-binding agreement to sell its coal and freight business to JERA, the joint venture of Japanese power companies TEPCO (50%) and Chubu (50%) that was created in 2015 to join force in fuel procurement (LNG, oil and coal), upstream development and gas investments.
Subject to final agreement (expected in December 2016), EDF Trading’s existing contractual agreement with JERA (2008) will be converted into a minority equity interest in JERA Trading Singapore. JERA Trading Singapore will also acquire 100% of the shares of EDF Trading Australia (which holds a 7.5% interest in the Narrabri coal mining joint venture in Australia) and 100% of the shares of Amstuw, which operates the Rietlanden coal terminal in the Netherlands.
EDF Trading handles around 100 Mt/year of coal (more than 7% of the estimated 1.3 Gt/year worldwide coal trading) and holds mining concessions, such as a 7.5% stake in the Narrabri coal mine in Australia. Acquiring coal trading activities from EDF would boost JERA's coal business, whose current coal procurement averages 20 Mt/year, and would make the joint venture a key coal seller in Japan and abroad.