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India's JSW Steel is negotiating to acquire a 20% stake in the Blackwater metallurgical coal mine owned by Australia's Whitehaven Coal, with the deal valued at $750million-$1 billion, sources reported.
The Blackwater mine, located in Queensland's Bowen Basin, is expected to produce an average 14.8 million tonnes of saleable met coal for steelmaking annually over the next five years.
Whitehaven Coal, the second-largest open-cut met coal producer in the region, was considering selling a 20% stake in the mine to global steelmakers and including them as strategic joint venture partners, according to Paul Flynn, CEO of the company.
A number of other companies, including Japan's Nippon Steel and other trading houses and Australian-based Indian company AvidSys Group, are also bidding for the Blackwater mine.
Coking coal is key raw material for steelmaking, while Indian domestic steelmakers relied on imports from Australia, Russia and Canada as most of domestic coking coal remained unexplored, and those founded were of inferior quality.
JSW Steel boasts 13 operating mines and acquired another seven iron ore and two coking mines through government auctions in 2023. The company has been looking at all opportunities, including acquisitions and strategic alliances, to strengthen its coking coal supply for capacity expansion.
Additionally, the company plans to raise its total production capacity to 36.70 million tonnes per annum (Mtpa) this year, 8.5 Mtpa higher from the current 28.2 Mtpa, taking the correction to 37.00 Mtpa by FY2025 and to 50.00 Mtpa by FY2031.
JSW Steel has established relationships with suppliers in Australia, Canada, Mozambique and Indonesia, and is exploring coking coal supplies in other regions to enhance raw material security. It has concluded yearly contracts with overseas suppliers to guarantee consistent quality of raw materials.
(Writing by yan.sun Editing by Harry Huo)
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