JSW Steel to pick up 66.67% stake in M Res NSW

13 Aug 2024 , 02:10 PM

JSW Steel said on Monday, August 12, that its board has approved a $120 million acquisition of a 66.67% economic interest in M Res NSW HCC Pty Ltd, an Australian firm. The investment will be made through JSW Steel’s fully owned subsidiary, JSW Steel (Netherlands) B.V., according to an exchange filing.

The acquisition includes the subscription to non-voting Class B shares in M Res NSW, with a further $50 million investment required by JSW Steel to cover the company’s deferred consideration commitments, which are due in 2030.

M Res NSW, owned by Matthew Latimore, the owner of M Resources Pty Ltd, has a 30% holding in Golden M NSW Pty Ltd, the potential owner of Illawarra Coal Holdings Pty Ltd. Illawarra Coal operates the Appin and Dendrobium coking coal mines and associated infrastructure in New South Wales, Australia. These mines have marketable reserves of 99 million tonnes of prime hard-coking coal and have produced an average of 6.5 million tonnes per year over the last five years.

The remaining 70% of Golden M is owned by Golden Investments (Australia) III Pte Ltd, a subsidiary of Golden Energy and Resources Pte Ltd (GEAR).

Following the acquisition, JSW Steel intends to create a market-linked offtake arrangement with Illawarra Metallurgical Coal to purchase coking coal. This arrangement will be proportionate to JSW Steel’s indirect economic interest in Golden M and its subsidiaries, according to the company’s press statement.

JSW Steel’s acquisition is part of the company’s long-term strategy to ensure a consistent supply of high-quality prime hard-coking coal, which is critical for steel manufacturing. Illawarra Metallurgical Coal, renowned for providing quality hard-coking coal, will improve JSW Steel’s blast furnace operations and expand coal mixing possibilities.

At around 1.09 PM, JSW Steel was trading 0.43% lower at ₹913.40, against the previous close of ₹917.35 on NSE.

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