BHP-Anglo American deal raises alarm in Japan's steel industry

MELBOURNE/TOKYO, May 09 (Reuters): Japanese steelmakers have raised concerns with Australian authorities that BHP Group could become too dominant in the global supply of coking coal if it goes ahead with a takeover of Anglo American.

Australia is the world's biggest exporter of coking coal and top supplier to Japan, making up around 60 per cent of its imports, with most of the steel-making ingredient coming from the state of Queensland, where BHP and Anglo American are the two largest producers.

Steelmakers' concerns about BHP's coking coal market power could derail a deal if the Australian giant comes back with a revised bid for Anglo American, after being rebuffed with a $39 billion offer last month.

"BHP already has a large share of the supply of high-quality hard coking coal in the seaborne trade, and we will take measures to ensure that further oligopolisation will not impede sound price formation and stable supply," a JFE Steel spokesperson said, declining to elaborate on what measures they could take.

Representatives of Japanese steelmakers met with Queensland government officials raising alarm bells that if a deal went ahead it would concentrate the world's top quality coking coal mines in the state's Bowen Basin in the hands of BHP, two people familiar with the talks said.