Indian steel manufacturer JSW Steel has agreed to acquire a 66.67% stake in Australian company M Res NSW HCC, an affiliate of M Resources, for $120m (Rs10.08bn).

The transaction forms part of JSW Steel’s efforts to expand its coal reserves.

Earlier this year, M Resources and Golden Energy and Resources (GEAR) signed a $1.65bn deal to acquire South32’s Illawarra metallurgical coal operation.

Upon completion of South32's coal business sale, which is expected by September 2024, JSW Steel has proposed a contract to buy hard coking coal from Illawarra in proportion to its indirect interest in Golden Energy and its subsidiaries.

In a press statement, JSW Steel said: “Raw material security and cost optimisation remain a key strategic priority for the company and this acquisition is a step forward in achieving those objectives.”

The stake will be purchased through JSW Steel's Netherlands-based subsidiary JSW Steel (Netherlands) B.V. with plans to invest an additional $50m by the end of 2030.

Currently, M Res NSW holds a 30% stake in Golden M NSW (Golden M), the proposed ultimate owner of Illawarra Coal Holdings.

Illawarra Coal Holdings’ operations include the Appin and Dendrobium coking coal mines and associated infrastructure in New South Wales, Australia.

These mines have total reserves of around 99 million tonnes of prime hard coking coal and reported average production of roughly 6.5 million tonnes per annum in the past five years.

The remaining stake of 70% in Golden M is owned by Golden Investments (Australia) III, a wholly owned subsidiary of GEAR.