JSW Steel to acquire stake in Australia’s M Res NSW

The move is in line with the Indian steelmaker's efforts to increase coking coal resources

Leading Indian steel producer JSW Steel has announced that it will acquire almost 67% of the shares of an Australian private company for $120 million in order to expand its coal reserves. This is reported by Mining Technology.

It is about buying a stake in M ​​Res NSW, a subsidiary of coal company M Resources. This year, the latter, together with Singapore’s Golden Energy, purchased the Illawarra metallurgical coal mining business from Australia’s South32 – the deal will be completed in September of this year.

Following the acquisition of the shares, JSW Steel, either directly or through its subsidiaries, intends to enter into a market contract for the purchase of coking coal from Illawarra Metallurgical Coal.

Illawarra’s assets include two coking coal mines in New South Wales, Australia, with total commodity reserves of high-grade raw material of 99 million tonnes. Over the past 5 years, these mines have produced an average of approximately 6.5 million tonnes of coal per year.

In a statement to the press, the Indian steel company said that the key priority for it remains the provision of raw materials and cost optimization. This acquisition is a step forward in achieving these goals.

The acquisition will be completed by the Indian company subscribing to non-voting Class B shares in M ​​Res NSW for an initial investment of $120 million. In addition, the terms require JSW Steel to further inject $50 million into M Res NSW for deferred consideration payable in 2030.

As GMK Center reported earlier, JSW Steel plans to invest $1 billion in the decarbonization of capacities. This will contribute to the company’s ambition to become carbon neutral by 2050 and reduce CO2 emissions by 42% (1.95 t CO2 per tonne of steel) by 2030