JFE Steel Corp, one of Japan's leading steelmakers, is currently in discussions to acquire a stake in Canada's Teck Resources' metallurgical coal business. This potential investment is part of the broader trend among major steel manufacturers to diversify their sources of coking coal, particularly due to sanctions imposed on Russia, one of the world's top producers.

These talks between JFE and Teck have been ongoing since September, according to sources close to the matter. Although the negotiations are in the early stages and there's no guarantee of a deal, it is a significant development in the steelmaking coal industry. Other steel companies have also expressed interest in Teck's coal business. Nippon Steel, for instance, is looking to purchase a 10% stake, with the option to increase it to 17.5%.

Teck has been exploring the possibility of splitting its coal and copper businesses since March, but the initial proposal was voted down by shareholders. It subsequently rejected a $22.5-billion unsolicited takeover bid for the entire company from Glencore, a Swiss mining and trading firm. Glencore has expressed its willingness to consider buying the coal business for around $8.5 billion.

JFE Steel, which already holds a 15% equity stake in India's JSW Steel, is actively looking to diversify its investments. The talks between JFE and Teck could open up new opportunities in the global metallurgical coal market.

Teck's CEO, Jonathan Price, aims to reach a decision on the potential split between its coal and metals businesses by the end of the year. This decision could involve a complete sale of the coal business for cash or a partial sale of the coal business, with the proceeds being reinvested in growing the copper business.

Both JFE Steel and Teck Resources have refrained from commenting on the ongoing discussions, but this potential investment represents a significant development in the evolving landscape of the coal and steel industries.