Itochu, the Japanese trading house, pulled off a coup this week, beating both Xstrata and Glencore to acquire a 20 per cent stake in Drummond International’s Colombian coal mining operation. The deal, worth an eye-watering US$1.52bn, reveals a renewed hunger for thermal coal as a looming power deficit hangs over earthquake-hit Japan.

Itochu buys $1.5bn Colombia coal stakeThursday’s transactions values the assets of Drummond International’s Colombian operation at $7.6bn, a significant premium to a total value perceived by other bidders of $6bn. As the FT reports, the deal will give the Japanese conglomerate “rights” to sell Colombian coal in Japan.

Itochu already has a presence in Colombia in the auto parts and life sciences space, but this will be its first mining deal in the region and is in line with its diversification strategy. Itochu currently sources the majority of its energy supplies from Australia.

Itochu will establish a new holding company, Itochu Coal Americas, for the units of Drummond International that it will acquire. Capitalized at US $761.75m, the new holding company will be 100 percent owned by Itochu.

The acquisition will provide Itochu with access to seven million tons of coal annually, which is enough to meet 6 percent of coal demands necessary for electricity generation in Japan, according to reports. Itochu said it is looking to raise its share in coal mining operations globally to 20 million metric tons annually in the next four years.

Itochu is attempting to diversify its energy supplies given the nuclear scenario currently playing out in Japan, Penn Bower, an analyst at brokerage firm CLSA . Coal has a low base-load and is a steady supplier of energy, Bower said.

But Colombia is a bit of a strange place to be investing in coal because of complicated logistics, and so the question is where these shipments are going to go, Bower continued.

Itochu, which is a major uranium supplier, already has coal assets through its energy portfolio via stakes held in Australian companies. A few days prior to Thursday’s acquisition, Itochu decided not to renew its agreement with Australia-listed coal explorer Aston Resources. This lead to speculation the Japanese trading company was unable to ink an attractive deal with its erstwhile partner and was seeking raw materials elsewhere.

Itochu, which has a market cap of JPY 1,200bn, is a major energy supplier with an energy profile comprising of oil, gas and uranium. In addition to the aforementioned regions, it also has an energy presence in Indonesia, China and Canada.