JSW Steel Ltd. said on Monday that its board has approved the acquisition of an economic interest of up to 66.67% in M Res NSW, in an investment amounting to $120 million or Rs 1,007.3 crore.
The investment will be made through its wholly owned subsidiary, JSW Steel (Netherlands) B.V., by subscribing to non-voting Class B shares, according to its statement to the exchanges on Monday. The company will further invest an additional $50 million (Rs 419 crore) in M Res NSW by 2030 to meet its obligations towards deferred consideration, the statement added.
The acquisition is to ensure raw material security and cost optimisation.
M Res NSW, owned by Matther Latimore, owns a 30% interest in Golden M NSW Pty Ltd., which owns the Illawarra Coal Holdings unit. Illawarra Coal Holdings operates Appin and Dendrobium coking coal mines and associated infrastructure in New South Wales, Australia. These mines have a total marketable reserve of approximately 99 million metric tonnes of prime hard coking coal and have produced on average 6.5 MTPA in the last five years.
The remaining 70% interest in Golden M NSW is held by Golden Investments (Australia) III Pte Ltd., which is a wholly owned subsidiary of Golden Energy and Resources Pte. Ltd.
JSW Steel, either directly or through its subsidiaries, will enter into a market-linked offtake contract with Illawarra Metallurgical Coal for the purchase of hard coking coal in proportion to its indirect economic interest in Golden M and its subsidiaries.
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