JSW Steel Limited has announced a significant investment in the Australian mining sector. On August 12, 2024, the company’s Board of Directors approved a deal to acquire up to 66.67% economic interest in M Res NSW HCC Pty Ltd (“M Res NSW”), a prominent player in the mining industry. The transaction, valued at USD 120 million, will be executed through JSW Steel’s wholly-owned subsidiary, JSW Steel (Netherlands) B.V., via the subscription of non-voting Class B shares.
This investment is a critical component of JSW Steel’s strategy to secure raw materials and optimise cost efficiencies, pivotal for its long-term growth and sustainability. The acquisition is set to reinforce the company’s global presence and bolster its supply chain resilience. M Res NSW, the target of this acquisition, is a key entity within the Australian mining landscape and is the founder of M Resources Pty Ltd, an influential international mining and trading firm. M Res NSW holds a 30% stake in Golden M NSW Pty Ltd (“Golden M”), which is poised to become the ultimate owner of Illawarra Coal Holdings Pty Ltd (“Illawarra Metallurgical Coal”). This entity operates the Appin and Dendrobium coking coal mines located in New South Wales, Australia.
These mines are significant assets, with an estimated 99 million tons of prime hard coking coal in marketable reserves and an average production capacity of 6.5 million tons annually over the past five years. The strategic importance of these assets aligns with JSW Steel’s goal to secure high-quality coking coal crucial for its steel manufacturing processes. Beyond the initial USD 120 million investment, JSW Steel has pledged an additional USD 50 million in deferred consideration, scheduled for payment in 2030. This commitment underscores the company’s long-term investment strategy and its confidence in the value and potential of the Australian mining sector.
The remaining 70% interest in Golden M is held by Golden Investments (Australia) III Pte Ltd, a subsidiary of Golden Energy and Resources Pte Ltd (“GEAR”). This acquisition highlights JSW Steel’s ongoing efforts to expand its global resources base and leverage international opportunities to drive its growth. With this investment, JSW Steel not only strengthens its strategic reserves but also positions itself for enhanced competitive advantage in the global steel market, reflecting a robust commitment to its international expansion strategy.
