Following the company board's approval on May 3 to acquire certain coking coal mining concessions in the US, the Indian steelmaker JSW Steel Ltd has completed the acquisitions in question. These mines are located in West Virginia having total resources of 123 million mt while the reserves are estimated to be around 45 million mt in part of the area where drilling was already done.
The company carried out due diligence on title, details of seams, resource estimates and quality, valuation and legal/financial matters, a company statement said, adding that the mines have railway and barge load-out facilities. The company applied for new permits to start work at some of the mines immediately, and these are expected to be granted in the next few months.
Based on the estimates on receipt of permits, it is planned to produce 1 million mt of coal in the first year starting from September 2010 which will go up to 3 million mt in the third year of operation.
This integration will benefit the company immensely even after factoring the higher freight from the US to India, JSW said, adding that the company is actively looking at acquisition of further coal mines to enhance the integration of coking coal.