JSW Steel’s $170 Million Power Move: Secures 66.67% Stake in Australian Coal Miner for Major Expansion

JSW Steel, India’s largest steelmaker, is set to purchase a controlling 66.67% stake in an Australian mining company, M Res NSW HCC Pty Ltd, for $170 million. This move is part of JSW Steel’s strategy to secure coking coal, a vital raw material that is in short supply in India. The company plans to use this coal to support its expansion goals.

Raw Materials and Optimizing Costs

The deal involves an initial payment of $120 million, with an additional $50 million to be paid by 2030. JSW Steel emphasized that securing raw materials and optimizing costs are top priorities, and this acquisition is a step towards achieving those goals. The mines owned by M Res NSW have about 99 metric tonnes of high-quality coking coal, and they have produced an average of 6.5 million tonnes per year over the last five years.

Import From Countries

Most of the coking coal used by Indian steelmakers is imported from countries like Indonesia, the USA, Russia, and Australia, due to the limited reserves of high-quality coal in India. As JSW Steel aims to increase its production capacity from 28.5 million tonnes per year to 37 million tonnes by FY25, and to 50 million tonnes by 2030, ensuring a steady supply of coking coal will be crucial.

Earlier in May, JSW Steel announced the purchase of a 92.19% stake in a Mozambique-based mining company, Minas de Revuboe (MDR), for $73.75 million. This deal provided access to over 800 metric tonnes of premium coking coal reserves.

M Resources

M Res NSW is owned by Matthew Latimore, the founder of M Resources Pty Ltd, an Australian company involved in mining, investment, marketing, and trading. Through its subsidiary JSW Steel (Netherlands), JSW Steel will acquire non-voting shares in M Res NSW.

Additionally, M Res NSW holds a 30% stake in Golden M NSW Pty Ltd, which is expected to own Illawarra Coal Holdings Pty Ltd. Illawarra owns the Appin and Dendrobium coking coal mines in New South Wales, Australia. JSW Steel plans to enter into an agreement with Illawarra to purchase coking coal based on its economic interest in Golden M and its subsidiaries.