“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,” JSW Steel said.

“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.”

Under the agreement, JSW Steel is acquiring an economic interest of up to 66.67% in an entity called M Res NSW HCC Pty. Ltd. The entity, which is owned by steel raw materials investor Matthew Latimore, holds a 30% interest in Golden M NSW Pty Ltd. 

Golden M is acquiring Illawarra Coal Holdings Pty. Ltd., whose assets include the Appin and Dendrobium coking coal mines in New South Wales, Australia. The mines collectively have a total marketable reserve of approximately 99 million metric tons, JSW Steel said, and have produced an average of around 6.5 million metric tons annually over the past five years.

JSW is paying US$170 million for the stake and will sign a market-linked offtake agreement with Illawarra Metallurgical Coal. The agreement will be proportionate to its indirect economic interest in Golden M and its subsidiaries, JSW Steel said.