JSW Is Currently Evaluating The Coal Mines Of Australia's BHP Group As A Potential Opportunity For A Lucrative Deal Worth USD 1.5-2 Billion
JSW Group Competes With Buyers For The Two Coking Coal Mines From Australia’s BHP Group To Fuel Its Blast Furnaces With A Buy-Out Worth USD 1.5-2 Billion
Following a decline of 32% in half-year earnings, BHP has decided to sell off its 20 MTPA Daunia and Faunus mines in Queensland. The factors taken into account for the decision were increased coal royalty in the state which displeased the company, along with concerns over ESG (environmental, social, and governance). 15–16 MTPA, out of the total 20 MTPA coking coal is employed in steel making whilst the rest is thermal coal.
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JSW will stand as the sole competitor from India to pit against industry giants in global steel trading and mining, including Posco, Nippon Steel, and Glencore, along with household mining companies Yancoal and New Hope Corp., as well as other private equity firms. Non-binding indicative bids are due in the weeks to approach.
Few experts monitoring the situation hinted that JSW is likely willing to consider joining the PE group as part of the consortium (partnership).
Shift To Alternative Fuels
Steel mills across the globe are now shifting to hydrogen or natural gas as substitutes for blast furnace fuels to lower their carbon footprint; however, these initiatives will not fully substitute coking coal.
The quality of the coking coal will directly impact the emissions and energy intensity; hence, the usability of Australian coking coal is vital. High-grade coals help lower carbon intensity by allowing blast furnace operations to be carried out more efficiently. JSW should also consider the freight costs from Australia and make a decision.
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According to the Procurement Resource article, Australia's BHP Group is selling its 20 MTPA Daunia and Faunus mines in Queensland after suffering a loss of 32% in half-year earnings.
This comes as an investment opportunity for India's JSW, which is hoping to close a deal for purchasing the coal mines for a lucrative deal worth USD 1.5-2 Billion as they seek a fuel source for their blast furnace operations.
