Jindal Steel and Power Limited (JSPL) has bagged the Kasia iron ore and dolomite block in in the Keonjhar district of Odisha. JSPL won the ore at 118 percent premium to the sale value of the ore at the latest auction process, reported The Economic Times.
“The mine isn’t cheap but is commercially viable and value-accretive as this is the best iron ore mine in Odisha with high Fe and low alumina ore,” Kapil Mantri, executive vice president and head-strategy, JSPL told the publication. “The mine has huge strategic importance for JSPL since after this we are over 50 percent secured for procurement of iron ore.”
The Kasia mining site is 194 hectares and was among the 11 mineral blocks for bauxite, iron ore and dolomite announced for auction in July by the Odisha government.
Other companies including Jindal Steel and Power Ltd, Adani Group, JSW, Tata Steel, ArcelorMittal, Essel Mining and Industries Ltd, Rungta Mines Ltd, MSPL, Vedanta and National Mineral Development Corporation (NMDC) also participated in the auction.
Earlier this month, more than 97 percent shareholders of JSPL approved the proposal to sell 96.42 per cent stake the company holds in Jindal Power for Rs 7,401 crore to Worldone. The company expects to conclude the deal by this year end.
Worldone will buy out all the equity shares and redeemable preference shares of JPL held by JSPL for a total consideration of approximately Rs 7,401 crore.
Out of total consideration, Rs 3,015 crore will be payable by cash, and the balance Rs 4,386 crore (approximately) will be by way of assumption and takeover of liabilities and obligations of JSPL in relation to inter-corporate deposits and the capital advances paid by JPL to JSPL.
The divestment of JPL is in line with JSPL's strategic objective to focus on its India steel business, become a net debt free company and significantly reduce its carbon footprint by almost half as part of its broader ESG objectives.[Inputs from PTI]