Itochu Corp., Japan’s fourth-largest trading company, has invested
in Winsway Coking Coal Holdings Ltd. to secure coal from Mongolia, stepping up competition with China and Russia for the steelmaking ingredient
as prices jump, says a report by Bloomberg.

Itochu joined a group led by
Hopu Investment Management Co., the $2.5 billion fund run by Goldman Sachs
Group Inc. partner Fang Fenglei, in investing in Winsway with the purchase of
$10 million of convertible debt last month, Ken Tezuka, manager of the
company’s coking coal section, said in an interview in Tokyo. Winsway, based in the British Virgin
Islands, transports coal from Mongolia
to China.

China Shenhua Energy Co. and
Russia’s government-run ARMZ
Uranium Holding are seeking access to coal and energy assets in Mongolia, the
home of some of the largest undeveloped mineral resources in the world. Itochu
wants to add Mongolian assets to its operations in Australia,
Indonesia and North America as prices climbed to a near record this
year.

“The current levels enable
Mongolian coal to sufficiently compete against coal produced in other regions,”
Tezuka said May 14. “Mongolian coal wasn’t viable to export when prices were
around $30 and $40” a metric ton.

Winsway has expanded sales
recently by investing in trucks to carry coal from mines in Mongolia,
including one close to the $2 billion Tavan Tolgoi coal deposit, Tezuka said.

Mongolia’s coal
exports to China
may climb to about 12 million tons this year from 8.5 million tons in 2009,
Alexander Molyneux, the chief executive officer of SouthGobi Energy Resources
Ltd., said last month.

China bought
about 4 million tons of coal in total from Mongolia
in 2008 out of national production of 10 million tons, according to a March 18
statement released by Japan’s
Ministry of Economy, Trade and Industry.

Mongolia will
develop its biggest untapped uranium field in a venture with Russia.
State-owned KOO MonAtom will hold at least 51 percent in a venture with ARMZ
Uranium and possible partners from Japan
or China, Bayarbayasgalan
Tudevbazar, nuclear materials chief of Mongolia’s Nuclear Energy Agency,
said last month.