JSW Steel, the flagship company of the diversified JSW Group, has signed an agreement to sell its entire stake in Chile’s Santa Fe Mining to Diego Calvo SpA, due to unviable business conditions. It has also proposed to liquidate investments in other subsidiaries in Chile over the due course of time.
JSW Steel is selling the venture for $700, and the deal is expected to be completed by September 30, the company said in a regulatory update.
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The Mumbai-based firm holds a 70% stake in Santa Fe Mining, which is held through its wholly-owned subsidiary, Inversiones Eurosh Limitada (IEL). Earlier in 2008, JSW Steel had entered into a joint venture with Chile’s Minera Santa Fe, controlled by a local entrepreneur, Leonardo Farkas Klein, to develop iron ore mines in South America, including Chile.
The JV firm — Santa Fe Mining — holds iron ore exploration concessions across mines in Belavista and Vinita in the Atacama region of North Chile. The consolidated negative net worth of Santa Fe Mining is Rs 517 crore, it said.
“While the lease of Bellavista, which had been operationalised, was terminated in FY21 due to uncertainties arising post the Covid-19 outbreak, in view of the then prevailing market conditions, iron ore mining in other mines was economically not viable…,” JSW Steel said in the stock exchange notice.
Additionally, it also proposes to liquidate investments in other subsidiaries in Chile, it said, but did not provide further details.
“…there would be no impact on the financial results of the company on account of this sale of SFM and liquidation of subsidiaries relating to Chile investments,” it said.
JSW Steel had bought the eight iron ore mining concessions in 2008 for $52 million.