Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
JSW Steel Ltd. is on the lookout for coal assets globally as the tycoon Sajjan Jindal-led mill seeks to tie up raw material supplies for its expansions in India.
India’s top producer of the alloy has plans to scale up its capacity to 50 million tons by the end of the decade. The Mumbai-based firm has been scouring mining resources locally and in other countries to avoid supply shocks and price risks. It is said to be considering bidding for a stake in the coal unit of Vancouver-based Teck Resources Ltd., Bloomberg reported earlier this month.
The quest for more natural resources comes as the country boosts its investments in building infrastructure, such as roads and airports. Local steel makers have lined up big expansion plans to meet the consumption growth. JSW’s search for coal assets also comes at a time when India is trying to cut its dependence on the thermal variety of the fuel to hit its net zero goal by 2070.
“We are looking at some coking coal assets internationally, whether it is Australia or Canada,” as some of the global miners have put their assets for sale or divestment, Joint Managing Director Jayant Acharya said in a interview. “We are looking at Canada options, which is not only Teck but there are some other mines as well,” he said on Monday, without providing further details.
“Our focus on raw material security is one of our strategies as we want to have backward integration,” Acharya said.
JSW’s two new coal mine projects in India are expected to start production in the next two-and-a-half years, Acharya said. The mill has also snapped up six iron ore mines locally in recent state auctions as the company is targeting to raise it captive raw material linkage to 75% of its needs from 45% now, he added.
“As our capacity expands, it’s important to add iron ore resources, otherwise this ratio will go down,” he said. JSW will continue to participate in more iron ore auctions, Acharya said.
While JSW’s focus will be on brown-field expansions for its steelmaking capacity, the company will also be looking at inorganic growth. The firm has expressed its initial interest to acquire state-run NMDC Ltd.’s steel plant.
Among other projects, mining assets linked to Vedanta Ltd.’s steel plant may be more interesting for JSW rather than the mill itself, Acharya said. Anil Agarwal’s company recently began a strategic review of its steel business.
(By Swansy Afonso)
Comments