JSW Steel buys US mines

JSW Steel, India’s third-largest steelmaker, has bought coking mines in North America for US$ 100 million.

Seshagiri Rao, joint managing director and group CFO, JSW Steel, stated that the mines in West Virginia have reserves of up to 123 million t. “One of the mines is operational and we plan to ship 1 million t of coking coal from this mine in the first year. The others will be ready in 24 months,” he said after announcing JSW’s fourth-quarter and annual results.

Rao said that the company is looking at various options to raise money to fund the expansion plans. “The board has approved preferential allotment of 1.75 crore warrants to the promoter. The money raised will be Rs 2100 crore and will constitute to about 9.36% of the existing paid up share capital of the company,” he said.

Rao also said that the steelmaker plans to raise production at the mine to 3 million t within three years time.

JSW Steel produced 5.99 million t of steel for the year ended March 31, 2010, and the company aims to produce 7 million t steel in the current year. “The demand is looking good. Our US subsidiary is also showing good improvement and is currently running at 28% capacity utilisation. This year, we are planning to take it up to 35 - 40%,” Rao said.

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