Naveen Jindal-promoted JSPL sells off Botswana Coal Mine for $150 mn as part of International Portfolio Rationalisation plan


Jindal Steel & Power Limited has reportedly sold off its Botswana coal mine to Maatla Energy for $150 million. Botswana coal mine, which was bought by Jindal Africa, a subsidiary of JSPL, for $116 million in 2012 as part of its global expansion, was one of the key international ventures of Naveen Jindal-owned JSPL.

File photo (JSPL website)

In 2012 the company increased its portfolio of projects through the acquisition of Canadian listed company, CIC Energy Corp for approximately US $ 116 million. The company later also undertook a number of studies and successfully obtained a mining license on its 2.7 billion tonnes coal resources.

Although JSPL has not confirmed the buyer’s name, Business Standard website quoted a company spokesperson as saying, “The Company has entered into a share purchase agreement to divest its stake in the Botswana project for a consideration of around $150 million. Since the transaction is progressing at this time, the Company would not like to further comment on it, till the transaction consummates. Any proceeds from this divestment will be used to pare down debt.”

The proceeds of the selling of Botswana coal mine are likely to be used by the JSPL to trim down its debt at the group level. The JSPL currently has a total outstanding debt of Rs 40,000 crore as on March 2019.

A JSPL spokesperson was further quoted by Business Standard as saying that the move to sell off the Botswana coal mine was a part of the ‘International Portfolio Rationalisation plan’ since the company has now shifted a renewed focus to the mines and minerals assets across Australia, Asia and Africa.

“The assets are being rationalised and monetised keeping in view their long-term viability, the raw material security for JSPL and the profitability of each of these businesses. The Group has been combing each asset, with a view of either exiting it or building it, to add to the bottom-line,” the JSPL spokesperson was quoted as saying.

Even though the JSPL has sold off its mine in Botswana, the company continues to have its  presence in several Southern African markets such as South Africa, Mozambique, Cameroon, Namibia, Zambia, Tanzania and Madagascar.

Jindal Steel & Power Limited (JSPL), a part of the $ 22 billion diversified OP Jindal Group, is amongst India’s fastest-growing and leading business conglomerates with a significant presence in core infrastructure sectors including steel, power, mining and infrastructure. JSPL’s business operations span across the Indian states of Chhattisgarh, Odisha and Jharkhand in India, where the company operates some of India’s most advanced steel manufacturing and power generation capacities on a global scale.

JSPL also has the world’s first DRI plant based on Indian High Ash Coal Gasification. It is also amongst the lowest-cost producers of steel and power in India. India’s largest Blast Furnace at JSPL Angul in Odisha has produced its highest ever hot metal production of 10845 million tonnes for a single day on 2nd July 2019. This is also the highest-ever production recorded by any of the BFs in India.