JSW Steel Ltd., India’s third- largest producer, is considering putting its overseas coal and iron ore assets into a unit for a share sale to fund expansion, two people familiar with the plans said.
The unit would control coal and iron ore mines in the U.S. and Chile, as well as an exploration business in Mozambique, said the people who declined to be identified as the plans aren’t yet public. JSW may list the unit in an overseas exchange, they said, without giving a timeframe.
JSW Steel, Tata Steel Ltd. and Steel Authority of India Ltd., the nation’s largest producers, are looking to buy mines in Australia, the U.S. and Africa, to feed furnaces as demand increases. The Indian steel market has expanded more than 55 percent since 2005, fueled by automobile sales and government construction.
Mumbai-based JSW Steel spokesman Mithun Roy didn’t reply to e-mailed questions from Bloomberg News.
Shares in JSW Steel have climbed 31 percent this year to close yesterday at 1,326.90 rupees, making them the third-best performer on the 35-company Bloomberg Asia Pacific Iron and Steel Index behind South Korea’s Hyundai Steel Co. and Australia’s Fortescue Metals Group Ltd.
JSW Steel bought seven coking coal mines in May in the U.S. with reserves of about 123 million metric tons. In Chile, the company’s Bellavista iron ore mines, acquired in 2008, are likely to start production by December, Group Chief Financial Officer Seshagiri Rao said last month.
The company’s Mozambique unit is exploring for coal and iron ore resources, according to JSW’s latest annual report.
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