NEW DELHI, Oct 12: Set to expand its global footprint, the country’s third-largest steelmaker JSW Steel is close to acquiring embattled West African iron ore miner London Mining in a bid to secure raw material for its plant.
“JSW Steel is very close to finalising a deal to acquire London Mining which is battling big debts amid crashing iron-ore prices and the Ebola outbreak in Africa, where it operates a mine,” a source privy to the information said.
The announcement of acquisition may be made on October 21 along with the financial results, the source said without divulging details of the deal or financial considerations.
Queries sent to the company about any possible acquisition of London Mining remained unanswered.
However, the Sajjan Jindal-led firm last week had said that it is open to expansions through acquisitions besides augmenting present capacities.
The statement had followed reports that the steel major is in advanced stages of acquiring London Mining.
“As a long term strategy, we would like to expand both organically by means of brownfield and greenfield expansions and inorganically by acquiring some existing assets,” the company had said in a filing to the BSE.
It had said that the company kept on scanning suitable opportunities, which have a strategic fit.
The debt-ridden UK-firm London Mining operates a small mine in Sierra Leone producing high grade iron-ore but is expensive to run. Sierra Leone is one of the worst-affected African nations by the ebola pandemic.
JSW Steel is about USD 9 billion global conglomerate spread over six locations in India and a footprint that extends to the US, South America and Africa.
The flagship company of about USD 11 billion JSW Group, JSW Steel has steel plants in Karnataka, Tamil Nadu and Maharashtra with a combined installed capacity of 14.3 million tonnes per annum (MTPA) which it plans to take to 40 MTPA in the next decade.
Set to foray into European market with the acquisition of an Italian steel firm, JSW Steel has on its radar a handful of potential companies for takeover both in the space of steel making as well as raw material.
Last month Sajjan Jindal had said there are many such units which are potential takeover targets, adding, “We are looking at iron ore assets all over — in Australia, Africa, North America and South America.” (PTI)
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