JSW Steel on Monday said its board has approved a proposal to acquire up to 66.67 per cent economic interest in Australian company M Res NSW HCC Pty Ltd for $120 million.
The investment would be made through its wholly-owned subsidiary JSW Steel (Netherlands) B.V, the steel major said in an exchange filing.
"The Board of Directors on August 12 approved the acquisition of an economic interest of up to 66.67 per cent in M Res NSW by way of subscription to non-voting Class B shares, for an investment of USD 120 million," it said.
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.
Advertisement
M Res NSW is owned by Matthew Latimore, the owner of M Resources Pty Ltd (M Resources), an international mining, investment, marketing and trading company, with headquarters in Australia.
It owns 30 per cent interest in Golden M NSW Pty Ltd, the proposed owner of 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 total marketable reserves of 99 million tonnes of prime hard-coking coal and have produced an average of 6.5 MTPA in the past 5 years.
The remaining 70 per cent interest in Golden M is held by Golden Investments (Australia) III Pte Ltd, a wholly-owned subsidiary of Golden Energy and Resources Pte Ltd (GEAR).
Advertisement
As part of the post-acquisition strategy, JSW Steel, either directly or through its subsidiaries, intends to enter into a market-linked offtake contract with Illawarra Metallurgical Coal for the purchase of coking coal, proportionate to its indirect economic interest in Golden M and its subsidiaries, the company said in a release.
The acquisition aligns with JSW Steel's long-term strategic goals and secures a stable supply of high-quality prime hard coking coal, which is critical for steel production, the statement said.
Illawarra Metallurgical Coal is a premium hard-coking coal operating mine. A secure supply of this high-quality coking coal allows for superior blast furnace operations and provides JSW Steel with coal blending options.
Just one email a week