- 13 Aug 2024
- ICICI Securities
JSW STEEL TO INVEST $120 MILLION FOR ECONOMIC INTEREST IN COKING COAL ASSET IN AUSTRALIA
JSWSTEEL - 1006 Change: 4.70 (0.47 %)News: JSW Steel has informed the exchanges that its board has approved the acquisition of 66.7% of economic interest in Australian mining company M Res NSW HCC Pty Ltd (M Res NSW) through the investment of US$120 million (~₹ 1,000 crore). This deal involves subscribing to non-voting Class B shares in M Res NSW. As part of the investment agreement, the company is expected to invest additional $50 million in 2030 to fulfil the company's deferred payment obligations. M Res NSW holds a 30% stake in a JV i.e. Golden M NSW Pty Ltd, ultimate owner of Illawarra Coal Holdings Pty Ltd2 (“Illawarra Metallurgical Coal”), whose operations consist of the Appin and Dendrobium coking coal mines and associated infrastructure in New South Wales, Australia.
Views: This acquisition includes mines with a total marketable reserve of 99 million tons (MT) of prime hard coking coal and have produced on an average ~6.5 million tonnes per annum of coking coal in the past five years. The move aligns with the company’s long-term strategy to secure a supply of prime hard coking coal, a crucial raw material for steel production. We maintain a positive stance on the stock, considering the company’s ambitious expansion plans to reach 50 MTPA by 2030, superior product portfolio, and healthy profitability guidance.
Impact: Positive