JSW Steel Ltd is planning to pick up 20 per cent to 40 per cent stake in Elk Valley Resources Ltd — a metallurgical coal unit of Teck Resources. JSW Steel Chairman Sajjan Jindal informed about the developments in this regard during an interview on Bloomberg TV. Indian business tycoon said that Indian steel major intends to bid for 20 per cent to 40 per cent of the coal unit of the Canadian company.
Sajjan Jindal went on to add that JSW along with some Japanese and South Korean mills is mulling to buy stake in the coal unit and the combine offer may worth $8 billion. The deal is likely to get inked within a month, Jindal added.
Teck produces very high quality metallurgical coal, which India needs for steel-making, as the locally mined material is mostly of a lower grade, Jindal said. “We believe that this could be a very strategic fit for us, therefore we are taking a significant stake."
As per a Bloomberg report, securing coal supplies is key for JSW’s plan to almost double its annual steelmaking capacity to 50 million tons in India by the end of the decade. The company is looking for coal assets globally, including in Australia and Canada.
However, barring from the Bloomberg interview of Sajjan Jindal, JSW Steel is yet to make any official announcement in this regard, Teck Resources replied to a Reuters query citing it does not comment on "market rumours or speculation".
Earlier, JSW Steel Chairman Sajjan Jindal had said in the company's annual report for the last fiscal that it would add 9 MTPA of new capacity in the next two years, taking its total capacity in India to 37 MTPA by 2024-2025.
Bloomberg News had reported last week that JSW Steel was seeking partners for an offer to acquire a 75 per cent interest in Elk Valley. A JSW-led consortium could yet face competition for the asset from Glencore Plc, which in June proposed buying the business for about $8 billion as an alternative to a full takeover of Teck.
