BENGALURU - JSW Steel is looking to pick up a 20 to 40% stake in the metallurgical coal unit of Canada's Teck Resources, Bloomberg News reported on Friday, citing the Indian steel producer's chairman, Sajjan Jindal.
India’s biggest steel producer intends to bid for 20% to 40% of Elk Valley Resources Ltd., a unit of the Canadian company, Jindal said. JSW, along with some Japanese and South Korean mills, is planning to buy a stake in the asset and a combined offer could value the unit at $8 billion, he said.
While JSW Steel did not immediately respond to a Reuters request for comment, Teck said it does not comment on "market rumours or speculation".
Sourcing metallurgical coal, a key raw material for steel production, is critical for JSW to meet its capacity target of 50 MTPA for India by the end of this decade.
Jindal had said in the company's annual report for the last fiscal that it would add 9 MTPA of new capacity in the next two years, taking its total capacity in India to 37 MTPA by 2024-2025.
He told Bloomberg that Teck produced a higher quality of the raw material than what is available in India and said the unit "could be a very strategic fit for us, therefore we are taking a significant stake”.
(Reporting by Nandan Mandayam and Hritam Mukherjee in Bengaluru; Editing by Sohini Goswami, Dhanya Ann Thoppil and Pooja Desai)