JSW Steel to Acquire Significant Stake in Australian Coal Company for USD 120 Mn The terms of the investment require the company to further invest USD 50 million in M Res NSW to fund its obligation towards the deferred consideration payable in 2030.
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JSW Steel has announced a strategic investment in Australian mining with the approval of a board proposal to acquire up to 66.67% economic interest in M Res NSW HCC Pty Ltd for USD 120 million.
The transaction will be executed through JSW Steel (Netherlands) B.V., a wholly-owned subsidiary, the steel major said in an exchange filing.
In addition to the initial investment, JSW Steel will commit an extra USD 50 million to M Res NSW to cover deferred considerations payable in 2030.
M Res NSW, owned by Matthew Latimore of M Resources Pty Ltd, holds a 30% stake in Golden M NSW Pty Ltd. This entity is set to own Illawarra Coal Holdings Pty Ltd, whose operations consist of the Appin and Dendrobium coking coal mines and associated infrastructure in New South Wales, Australia.
These mines have substantial marketable reserves of 99 million tonnes of high-quality hard coking coal and a production average of 6.5 million tonnes per annum over the past five years.
Golden M's remaining 70% stake is held by Golden Investments (Australia) III Pte Ltd, a subsidiary of Golden Energy and Resources Pte Ltd (GEAR).
Following the acquisition, JSW Steel has proposed to enter into a market-linked offtake contract with Illawarra Metallurgical Coal for the purchase of hard coking coal in proportion to its indirect economic interest in Golden M and its subsidiaries once the sale of the company is completed next month, the company said. Thus, the investment aligns with JSW Steel's strategy to secure high-quality raw materials and optimise its cost structure.
"A secure supply of this high-quality coking coal allows for superior blast furnace operations and provides JSW Steel with coal blending options. Given the limited visibility of additional capacity premium hard coking coal assets, this acquisition is an important step in securing raw material for JSW Steel," the company said in a separate statement.
