JSW Steel acquires US coking coal mines for $100 million
14 May 2010
JSW Steel, part of the $8 billion O P Jindal Group, has completed the acquisition of coking coal mines in West Virginia, in the US. JSW Steel, India's third-largest steelmaker, bought the coking coal assets in the US for a total consideration of $100 million.
The mines are expected to hold total coal resources of 123 million tonnes, with estimated reserves of around 45 million tonnes on part of the area where drilling has already been carried out.
Coal production from the mines is expected to start from September 2010. Initial production is estimated at 1 million tonnes of coal, which will go up to 3 million tonnes in the third year of operation.
One of the mines is already operating and the mine has its own railway load out and barge facility.
The estimated annual coking coal requirement of JSW Steel is around 5 million tonnes at current capacity and the US acquisition will help the company meet around 20 per cent of its coking coal requirements in the first year of integration.
This will go up to 35 per cent at the mines' enhanced capacity of 11 million tonnes.