MUMBAI (Commodity Online): Indian steel producer, JSW Steel Ltd (BOM:500228) is considering coal mines acquisition in the United States to ensure fuel security for its production requirements. The deal is expected to strike in early months of the next fiscal.

The company is in advanced stages of negotiations for two coal mines located in West Virginia, a district known for its coal reserves. According to industry experts the region has some of the prominent coal players in this region including United Coal. But the coal reserves that JSL is looking at could be less than 165 million tonnes.

The company was bullish towards overseas coal mines acquisitions from the US, Australia, Indonesia and South Africa. It has been importing coking coal from Australia and aims to secure 50% of coal supplies through captive sources, including global buyouts.

After the completion of the company’s expansion drive, JSL’s steel production would hit 10 million tonnes from the last year’s production of around 7 million tonnes. The company expects the expansion process to get over by end of next fiscal. The increase in production will require use of an additional 5 million tonne coking coal.

The company stocks performed negative over past one month on the Bombay Stock Exchange (BSE) after sinking by 13.8% since 12th January, 2010. However, the stock price was on the rise in past five trading session on the back of the possible coal mine acquisition that will improve the company’s position in the fuel security for steel production. The stocks gained by over 2% in past five trading sessions on the BSE and closed at Rs.986.20 on Thursday, 11 February, 2010.

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