JSW group, Japan's JFE in race to acquire 30% in Australian mine

Several Indian companies including Tata Power, Adani, and the Essar group had acquired coal mines overseas as part of their strategy to secure their raw material supplies

The JSW group and Japan’s JFE have offered to acquire up to 30 per cent stake in an Australian coal mine currently owned by Whitehaven Coal.

The Sajjan Jindal-owned company is planning to make an aggressive offer to secure its raw material supplies, said a banker close to the development.

Whitehaven Coal is selling a minority stake in Blackwater’s metallurgical coal mine, which has attracted interest from the JSW group.

The Australian company is keen on selling up to 30 per cent stake in the mine to both suitors instead of 20 per cent stake to one party, said a banker.

 

Earlier reports in February this year had said JSW will pick up a 20 per cent stake in the mine for close to $1 billion but the valuation of the final offer is now known.

Both JFE and JSW have formed a 50:50 joint venture in India — JSW JFE Electrical Steel Private Ltd — to set up a Rs 5,500-crore plant in Karnataka. Production at the unit is expected to begin from FY27. JFE owns a 14.99 per cent stake in JSW Steel.

An email sent to the JSW group did not elicit any response. Whitehaven Coal declined to comment on the sale. Bankers said Whitehaven will take a final call on the offers by June-end.

JSW is not alone in acquiring coal mines across the world.

Earlier, several Indian companies, including Tata Power, Adani and the Essar group had acquired coal mines overseas as part of their strategy to secure raw material supplies.

The JSW group has made ambitious plans to invest in several sectors. In March this year, the group announced a joint venture with China’s SAIC Motor to acquire 35 per cent in MG Motor India. It is planning to invest Rs 40,000 crore to set up an electric vehicle and battery manufacturing unit in Odisha.

At the same time, JSW Steel plans to increase its capacity to 50 million tonnes per annum by 2030, and wants to secure its raw material supplies via acquisitions.

The company has been scouting for alternative high quality coal mines in Australia and other parts of the world in the last few years.

JSW group has built its empire by acquiring several steel assets in India, including Ispat Steel's unit in Maharashtra and Bhushan Power and Steel.

The group is also in the race to acquire a majority stake in MG Motor India so that it can enter the electric vehicle segment here.

It announced a Rs 40,000-crore investment in Odisha earlier this month.

Flagship JSW Steel and JSW group entities announced last week that they would invest about Rs 65,000 crore over time to set up an integrated manufacturing complex in Jagatsinghpur, Odisha.