Sajjan Jindal?s JSW Energy is fast acquiring overseas coal assets to feed its power plants in India. The company on Thursday announced that it has entered into a memorandum of understanding (MoU) with Dubai-based Osho Venture FZCO and Indian Ocean Mining (Pty) Ltd (IOM), South Africa, to acquire 70% equity interest in IOM from Osho. IOM has certain coal prospecting rights in the north-west region of South Africa.
?The MOU is part of the strategy to enhance fuel security for which JSW Energy is continuously evaluating various strategies and proposals to secure long-term imported coal linkages,? the company said in a statement. The MoU is subject to the company carrying out due diligence, execution of definitive agreements and compliance with regulatory requirements, it added.
Industry sources say the company is expected to invest a few hundred crores for this deal.
JSW Energy?s shares on Thursday were up 2.35% to close at Rs 121.70 on the Bombay Stock Exchange.
JSW Energy is scouting for thermal coal linkages globally to secure fuel for its power plants. In April 2010, the firm acquired a majority stake in South African Coal Mining Holdings for $50 million.
JSW Energy, which plans to invest around Rs 40,000 crore in developing power projects of 8,000 mw, raised Rs 2,700 crore through an initial public offer (IPO) in December 2009. The firm aims to generate 11000 mw by 2015.
Coal, which is the key raw material for the steel and power industry, has been a much-sought after commodity with most Indian companies scouting globally for coal mines. Power, steel and cement companies are at the forefront in acquiring coal assets from Australia, South Africa, Mozambique, Zimbabwe and Indonesia.