JSW To Compete With Australia's BHP Group To Acquire Two Coking Coal Mines
As reported by insiders, JSW Group has joined the battle to acquire two coking coal mines from Australia's BHP Group in a potential $1.5-2 billion transaction as the Indian steelmaker seeks resources to fuel its blast furnaces.
BHP is selling the Daunia and Faunus mines in Queensland, which have a combined capacity of 20 million tonnes per annum (MTPA). This follows a 32% decline in half-year earnings, discontent with the state's coal royalty hike, and ESG (environmental, social, and governance) issues. 15-16 MTPA of the 20 MTPA being coking coal used in steel production, with the remainder being thermal coal.
JSW will compete against global steel trading and mining businesses such as Nippon Steel, Posco, and Glencore, as well as local mining groups Yancoal and New Hope Corp. and many private equity groups. In the coming weeks, non-binding indicative bids are required.
According to some experts who are keeping a close eye on developments, JSW may be receptive to forming a partnership with a private equity entity. BHP and its Japanese partner, trading company Mitsubishi, have also chosen to divest the Blackwater mines from their joint venture in Queensland, BHP Mitsubishi Alliance.
In May 2022, BHP sold its 80% ownership in the BHP Mitsui Coal (BMC) coking and thermal coal joint venture to Australian firm Stanmore. The Hay Point port complex near Mackay has a capacity of 55 MTPA, but only exported 46.3 MTPA in 2022.