JSW Steel Makes Bid For A 20 Per Cent Stake In Australian Coal Mine

Sajjan Jindal-led JSW Steel is in discussions to acquire a 20 per cent stake in the Blackwater coal mine, owned by Australia's Whitehaven Coal.

“Two parties — one from Japan and one from India — may be about to surface as buyers of a stake. While the identities are unknown, sources pointed to steel producer JSW Group of India or Nippon of Japan,” the Australian Mine Safety Journal reported.

Though companies are yet to decide on the final valuation, the deal is expected to between $750 million and $1 billion, said sources familiar with the matter. It is projected that the deal will be finalised by the end of the current financial year.

In October 2023, Whitehaven completed the acquisition of the Blackwater and Daunia metallurgical coal mines from BHP Mitsubishi Alliance (BMA) for a total cash consideration of $3.2 billion.

Situated 73 kilometres southeast of Emerald in Queensland, on the traditional lands of the Gaangalu people, the Blackwater mine stands as one of the lengthiest coal mines in the Southern Hemisphere, boasting a strike length of 80 kilometres.

Whitehaven has expressed its intention to divest a 20 per cent stake in the Blackwater mine to global steelmakers, aiming to bring them in as strategic joint venture partners.

It is to be noted that this is the second attempt by JSW Steel to acquire mining assets for coking coal overseas. The steel major had earlier pulled out of race to acquire a majority stake in the metallurgical coal business of Teck Resources, with the Canadian company picking the offer from Swiss mining major Glencore Plc.

Coking coal is a key raw material for steel making. India, the second largest producer of crude steel globally, is also the largest importer of coking coal in the world, with shipments estimated at 70–75 million tonnes. Domestic steelmakers rely entirely on imports from Australia, Russia and Canada.

JSW Steel aims to boost its capacity to 50 million tonnes per annum (MTPA) within the next decade, up from the current 28 MTPA. To achieve this goal, the company is seeking to secure a stable supply of metallurgical coal for its coal-fired blast furnaces in India.