JSW Steel evaluating coal mine buyout proposals

Sajjan Jindal-led JSW Steel is evaluating proposals to acquire coal mines overseas to meet its long-term captive requirement and hedge against surging prices of the dry fuel. The company has been looking for coal mines in Australia, America and Africa.

JSW Steel had received a set back in Mozambique as the blocks for which mining concessions were granted to it found to be unviable for steel making. Initial survey in these mines revealed that the ash content was around 60 per cent there.

JSW Steel currently imports its entire coal requirement of 4.5 million tonnes per annum (mtpa) to feed its Bellary steel plant mainly from Australia. The plant has 6.8 mtpa steel making capacity now. However, JSW Steel's demand for coal is set to go up further as it increases the installed capacity at the plant to 10 mtpa by March 2011.

The price of coking coal is on the rise with the revival of steel demand. The long-term rates of the raw material are expected to be 20-40 per cent higher in the next fiscal from the current level of around $100 per tonne.