May 3: JSW Steel is the latest Indian firm to join the coal bandwagon. The company is planning to acquire mines for coking coal — used to produce steel — in the United States.
The estimated size of these reserves is 123 million tonnes. The company will pay for the acquisition using a mix of debt and internal accruals.
“We have raised $100 million for the acquisition from internal accruals and debt. Production may start at one million tonnes a year and increase to three million tonnes by the third-year. These mines are owned by a string of companies in the US,” said Mr Sheshagiri Rao, JSW Group CFO and joint managing director.
JSW is the latest amongst Indian corporates looking at acquiring coal assets outside India.
In April, JSW Energy, a group firm, acquired a stake in a coal mine in South Africa for $85 million. Essar Group, which has a presence in steel, oil and power sectors acquired a coal mine in the US for $600 million in March.
Meanwhile, public sector majors such as NTPC, NMDC and Coal India are also trying to acquire coal assets abroad.
Other leading firms including Tata Steel, Tata Power and GMR Infra had also acquired coal mines in the bull market leadign up to 2009.