JSW Steel is picking up a 66.67 per cent stake in an Australian company which holds shares in a coking coal miner based in New South Wales (NSW) for $120 million or around ₹1000 crore in an effort to tie up raw material for its fast-growing business in India.

The mines, where JSW Steel will have an indirect stake, have total marketable reserves of 99 million tonne of prime hard coking coal and they have produced, on an average, 6.5 MT per annum in the past five years.

The terms of the investment require JSW Steel, led by billionaire Sajjan Jindal, to further invest $50 million (₹420 crore) by 2030. The Australian venture comes close on the heels of JSW acquiring a stake in a Mozambique company which plans to develop a coking coal mine in future. In May, the company acquired 92 per cent stake in Minas de Revuboe (MDR) which has access to 800 MT of hard coking coal even as the mines are not operational as yet.

Indian steelmakers are predominantly dependent on imports to meet their requirement for coking coal, an important raw material to produce steel through the blast furnace route. Australia is one of the major suppliers of coking coal to India.

In a notice to the bourses on Monday, JSW Steel said its board approved acquisition of an economic interest of up to 66.67 per cent in M Res NSW HCC Pty (M Res NSW) by way of subscription of non-voting class B shares for $120 million through its wholly owned subsidiary JSW Steel (Netherlands) B.V.

M Res NSW is owned by Mattew Latimore, the owner of M Resource Pty Ltd, an international mining, investment, marketing and trading company.

M Res owns a 30 per cent stake in a joint venture formed to acquire the Illawarra Metallurgical Coal business of South32 Limited, listed on the Australian Stock Exchange, consisting of Appin and Dendrobium mines and associated infrastructure in New South Wales. The remaining 70 per cent stake is held by Golden Investments (Australia) III Pte. Ltd.

As part of the post-acquisition strategy, JSW Steel, either directly or through its subsidiaries, intends to enter into a market-linked offtake contract with Illawarra Metallurgical Coal for the purchase of coking coal, proportionate to its indirect economic interest in Golden M and its subsidiaries.

The acquisition aligns with JSW Steel's long-term strategic goals and secures a stable supply of high-quality prime hard coking coal, which is critical for steel production. Illawarra Metallurgical Coal is a premium hard coking coal operating mine. A secure supply of this high-quality coking coal allows for superior blast furnace operations and provides JSW Steel with coal blending options. Given the limited visibility of additional capacity premium hard coking coal assets, this acquisition is an important step in securing raw material for JSW Steel.