MUMBAI: Sajjan Jindal-led JSW Steel is in talks to acquire a 20% stake in a coal mine owned by Australia’s Whitehaven Coal, in a deal valued at $750 million-$1 billion.
A number of other firms, including Japan’s Nippon Steel, are also in the race to acquire Blackwater mine, located in Queensland’s Bowen Basin.
Whitehaven Coal had announced plans to sell the stake in the metallurgical coal (coal used to make steel) mine — the second-largest open-cut met coal producer in the region. The firm has set a mid-March deadline for the first round of bids. The name of the successful bidder would be announced on or after April 2.
Blackwater mine is expected to generate an average 14.8 million tonne of saleable met coal annually over the next five years.
Whitehaven CEO Paul Flynn had earlier said the company was looking to pare a 20% stake in the mine to global steelmakers and to rope them in as strategic joint venture partners. Other interested parties include Australia-based Indian company AvidSys Group, Japanese trading houses Itotchu, Marubeni and Sojitz.
UBS is the advisor for the deal.
A JSW Steel spokesperson declined to comment on the matter.
JSW Steel has been scouting to acquire mines, both in India and globally. An earlier plan to acquire up to 75% stake in Canada’s Teck Resources’ metallurgical coal or coking coal business fell through. The company has since been looking at all possibilities, including acquisitions and strategic alliances, to improve its coking coal supply.
JSW Steel is planning to increase production capacity to 37 million tonne per annum by FY25 and to 50 MTPA by 2030, for which it needs additional raw materials such as coking coal.
JSW’s expansion plans include adding a total of 8.5 MTPA — 6.5 MTPA plus another 2 MTPA at Vijayanagar — this year, taking its total capacity to 36.7 MTPA from the present 28.2 MTPA.
It has 13 operational mines and won another seven iron ore and two coking coal mines through government auctions in 2023.
Last week, JSW Group announced plans to invest Rs 65,000 crore to set up an integrated green steel manufacturing complex at Jagatsinghpur, Odisha, which will also house a cement facility and a port, and generate about 30,000 jobs.
Prior to this, the group signed a memorandum of understanding with the Odisha government to set up electric vehicle and electric vehicle battery facilities in Cuttack and Paradip with a Rs 40,000 crore investment over a three-year period.
Source: The Financial Express
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