Posted on 21 May 2024
JSW Steel, a major player in India's steel industry, has strategically secured essential raw materials by acquiring a Mozambique-based mining firm specializing in high-grade coking coal, Kallanish notes.
JSW Steel will obtain a 92% equity stake in Minas de Revuboe (MDR) and shareholders' loans for $73.7 million.
This deal grants JSW Steel access to over 800 million metric tonnes of premium hard coking coal reserves in Mozambique, as revealed in an investor presentation from 17 May 2024.
This strategic step highlights JSW Steel's dedication to bolstering its raw material supply chain.
Coking coal is a vital ingredient in primary steel production, and owning a mining operation in Mozambique will help JSW Steel mitigate supply chain risks and reduce dependency on external suppliers.
The company is reportedly also considering acquiring a 20% stake in Australia's Whitehaven Coal's Blackwater coal mine, valued between $750 million and $1 billion.
However, its previous attempt to acquire up to 75% of Canada's Teck Resources' metallurgical coal business fell through last year.
Indian steel mills heavily rely on imports to fulfil their coking coal needs due to a shortage of good quality domestic coking coal.
In 2023, India imported approximately 55 million tonnes of coking coal, with JSW Steel accounting for approximately 23% of total imports, according to customs data.
Source:Kallanish
