Mumbai, May 17 (IANS): JSW Steel on Friday said that its board of directors have approved the acquisition of mining company Minas de Revuboe (MDR) in Mozambique to secure supplies of high-quality coking coal used for steel production.
The Sajjan Jindal-led company said in an investor presentation that its subsidiary JSW Natural Resources Limited will buy a 92.19 per cent equity stake and shareholders loans of MDR for $73.75 million.
The deal will give the Indian steel major access to more than 800 metric tonnes of premium hard-coking coal reserves in Mozambique. MDR owns a high-quality and large-scale pre-development stage premium hard-coking coal mine project in the Moatize Basin of Tete Province in Mozambique.
The deal is subject to approval from Mozambique’s Ministry of Mineral Resources and Energy and other applicable approvals.
Indian steel companies consume around 70 million metric tons of coking coal annually, and imports constitute around 85 per cent of the country's total requirement. as the commodity is not available in the country in sufficient quantity. Coking coal is imported from Australia, Indonesia, Russia, the USA and Canada.
However, there has been a spike in prices of coking coal in recent months which has been impacting the bottomlines of the steel companies.