JSW Steel eyes coking coal assets to beef up raw material security

Target is to have 25% linkages in the next few yrs: Acharya

JSW Steel has domestic and international coking coal assets in its sights as it looks to reinforce raw material security.

The conglomerate was recently declared a preferred bidder for two coking coal blocks in Jharkhand.
 

Jayant Acharya, joint managing director and chief executive officer, JSW Steel, said, “These are domestic coking coal assets that JSW has won through bidding on auction. These mines would give us 1 million tonne (mt) of finished coking coal, or roughly 

5 per cent of our current requirement.”
 

“We will continue to pursue such domestic opportunities in the future,” he added. The target, said Acharya, was to have 25 per cent linkages in the next few years. To achieve this, JSW plans to explore multiple options.
 

“We are also trying to look at linkages that have coking coal characteristics. We will be setting up washeries and then use some part of it in the blend of coke ovens,” he said. Acharya also said, “We will look at the international landscape and evaluate assets that make sense with respect to strategic and economic fit.”
 

JSW is understood to have evinced an interest in coal mines owned by Australia’s BHP Group. They are undergoing a sale process.
 

Asked about it, Acharya said, “We are evaluating assets for raw material security and continue to look at various options. We will not be able to comment on any specific one.”
 

Coking coal assets are available in Australia, Canada, and the US; there are stray facilities in Mozambique and Indonesia as well. JSW may look at operating assets or those nearing final stages of entering mining operations.
 

Coking coal and iron ore are two major steelmaking inputs. While the steel industry meets its iron ore requirements from the domestic market, about 90 per cent of the industry’s coking coal demand is imported.
 

On the iron ore front, JSW is targeting 50–75 per cent of its requirements from captive sources. Last year, on a consolidated basis, supplies from captive mines were about 45 per cent.
 

“We have additionally acquired four more iron ore mines, which will add to our backward integration plans towards raw material security,” said Acharya.
 

The new mines are likely to add close to 5 mt more supply for JSW’s captive use.
 

Increased raw material security will give the company a cost advantage. JSW currently has a steelmaking capacity of about 28 mt. But a major expansion is underway that would take its capacity to 37 mt by 2024-25. For enhanced capacity, the coking 

coal requirement would be 20 mt and iron ore 70 mt.