JSW Steel: In a deal estimated to be worth between $750 million and $1 billion, Australia’s Whitehaven Coal is selling 20% of a coal mine to Sajjan Jindal’s JSW Steel. The Blackwater Mine, which is situated in Queensland’s Bowen Basin, is being pursued by a number of other companies, including Nippon Steel from Japan.
The second-largest open-cut met coal producer in the area, Whitehaven Coal, had stated that it intended to sell its interest in the metallurgical coal (coal used to make steel) mine. The first round of bids is due to the firm by mid-March. On or after April 2, the successful bidder’s name would be revealed.
Blackwater Mine is anticipated to
Over the following five years, produce an average of 14.8 million tonne of saleable met coal annually.
Paul Flynn, CEO of Whitehaven, had previously stated that the company intended to form strategic joint ventures with international steelmakers and sell them a 20% stake in the mine. The Indian company AvidSys Group, based in Australia, and the Japanese trading houses Itotchu, Marubeni, and Sojitz are among the other interested parties.
The deal’s advisor is UBS.
A representative for JSW Steel declined to offer commentary.
JSW Steel has been searching for mines to purchase both domestically and internationally. An earlier plan to purchase up to 75% of the coking or metallurgical coal division of Teck Resources, a Canadian company, was abandoned. Since then, the business has been exploring all options to increase the supply of coking coal, including mergers and acquisitions.
JSW Steel intends to boost production capacity by 50 MTPA by 2030 and 37 million tonne annually by FY25. To do this, the company will require more raw materials, such as coking coal. According to JSW’s expansion plans, it will add 8.5 MTPA total this year (6.5 MTPA plus an additional 2 MTPA at Vijayanagar) to increase its total capacity from the current 28.2 MTPA to 36.7 MTPA.
In 2023, it won two coking coal mines and seven iron ore mines through government auctions, bringing its total number of mines under operation to 13. The JSW Group revealed last week that it would invest Rs 65,000 crore to build an integrated green steel manufacturing complex in Jagatsinghpur, Odisha. The complex will create roughly 30,000 jobs and house a port and cement facility.
Previous to this, the group and the Odisha government signed a memorandum of understanding for the establishment of electric vehicle and electric vehicle battery facilities in Cuttack and Paradip, with an estimated three-year investment of Rs 40,000 crore.
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