JSW Steel is considering forming a consortium to bid for a 75% interest in Teck Resources’ steelmaking coal business, according to a Bloomberg report.
In July, Bloomberg News reported the Mumbai-based company was interested in buying up to 20% of Elk View Resources in British Columbia.
A deal could value the coal business at more than $8 billion and JSW has been sounding out banks about financing for a potential offer, the report said. Representatives for JSW and Teck both declined to comment.
A JSW consortium could face competition from Glencore, which in June proposed buying the business for about $8 billion as an alternative to a full takeover of Teck.
Around that time, Teck said it had received a number of indications of interest in its coal operations, without naming the parties.
Japan’s Nippon Steel had agreed to take a stake in a spun-off Elk Valley Resources in February before Teck dropped the plan to split its coal and metals businesses.
Earlier this month, Glencore underlined its continued interest in a deal with Teck by holding back $2 billion for a potential purchase of the Canadian miner’s coal business — cash it would otherwise have returned to shareholders.
Teck has the Highland Valley Copper mine in British Columbia, Canada, the Quebrada Blanca and Carmen de Andacollo copper mines in Chile and an interest in the Antamina copper-zinc mine in Peru.
The company is also in the midst of expanding Quebrada Blanca. The project, dubbed QB2, is one of the world’s largest undeveloped copper resources.
Shares of Teck rose 5.2% by 11:21 p.m. EDT. The company has a market capitalization of C$27.5 billion ($20.3 billion).
