Bourse bound

Mumbai, Aug. 3: JSW Steel, the Rs 34,368-crore steel giant, is thinking of listing its overseas mining assets on the London Stock Exchange (LSE).

The listing plan, which is now at a preliminary stage, will be unfurled after the consolidation of the mining assets into a single holding company and after it turns profitable, sources indicated.

If JSW Steel is able to execute the plan, it will be the third India-focused resources company after Vedanta Resources Plc and Essar Energy to be listed on the LSE.

JSW Steel has iron ore and coal mines in the US, Chile and Africa. Both these raw materials account for 65 per cent of the steel production costs.

Sources said the company had drawn up ambitious plans to increase the output from these mines over the next three years. For instance, in the US (West Virginia) where it has a coking coal asset, the plan is to ramp up the production capacity to 3 million tonnes by 2015.

Similarly in Chile, which already produces iron ore of around 1 million tonnes, the target is to raise the production to 5 million tonnes by 2015.

In Africa, the company has three mines, two of which are located in Mozambique and Kenya. Industry circles here added that these coal mines have estimated reserves of around 200 million tonnes, of which one asset is already producing around 1 million tonnes a year.

“JSW had earlier considered listing its overseas mining assets. But it was put on the backburner; the plan is now being revived. However, it will happen only after consolidation into a single holding company which could be listed and after the assets turn profitable,” sources in the industry said.

Domestic steel and power firms have been trying to acquire overseas mineral assets over the past few years with requirements rising and delayed approvals for mining applications here in the country.

Group company JSW Energy is understood to be looking to acquire raw material assets in Australia, South Africa and Mozambique. Currently, the company is importing coal from overseas market to meet its fuel requirements as it does not have any captive mines in the country.

At its annual general meeting recently, Sajjan Jindal, chairman of JSW Energy, had said the unit was continuously identifying and developing relationship with coal miners in some large coal exporting countries to ensure procurement of quality thermal coal at competitive rates and longer-term contracts. At present, it has a majority stake in South African Coal Mining Holding.