JSW Steel is considering
acquiring a 75% stake in Teck Resources' steelmaking coal business Elk Valley
Resources. The deal could value the business at $8 billion.
JSW Steel Ltd is considering picking up a
75% interest in Teck Resources' steelmaking coal business Elk Valley Resources,
according to a Bloomberg report. Bloomberg had reported in July that the
Mumbai-based company was interested in up to 20% of Teck’s coal business.
The potential deal could value the business at $8 billion, said Bloomberg,
rivaling an earlier bid by Swiss commodities giant Glencore.
According
to Bloomberg, Teck said it had
received a number of indications of interest in its coal operations, without
naming the parties. Japan’s Nippon Steel Corp. had agreed to take a stake in a
spun-off Elk Valley Resources in February before Teck dropped the plan to split
its coal and metals businesses.
Earlier this
month, Glencore underlined its continued interest in a deal by holding back $2
billion for a potential purchase of the Canadian miner’s coal business — cash
it would otherwise have returned to shareholders.
A deal could value the coal business at more than $8 billion and JSW has been
sounding out banks about financing for a potential offer, according to the
people. Deliberations are ongoing and there’s no certainty an agreement will be
reached, they said, asking not to be identified discussing confidential
information.
Representatives
for JSW and Teck declined to comment.
Any JSW
consortium could yet face competition for the coal asset from Glencore, which
in June proposed buying the business for about $8 billion as an alternative to
a full takeover of Vancouver-based Teck.