Simultaneously, last week, JSPL’s Australian arm picked up 31.49 per cent stake in Gujarat NRE Coking Coal, also ASX listed, though market purchases.
Navin Jindal-controlled JSPL has been on an overseas mineral resources interest-buying spree in the past few years. JSPL, which currently holds 11.7 per cent stake in Apollo Minerals, has committed an investment of A$10 million in the three iron ore projects. The investment will be made through subscription in the proposed initial public offer of NewCo.
In Gujarat NRE Coking Coal, JSPL has invested around A$ 50 million in equities so far through participation in equity placement and on-market open offer. In a strategic partnership with JSPL, Apollo Minerals has initiated moves to hive off three iron ore tenements into NewCo.
According to the plan, NewCo will have two exploration and development projects in Australia and one in Gabon. Apollo Minerals will transfer the assets including the 70 per cent interest in the African asset to NewCo in the hive-off exercise, expected to be complete by next three months.
Company sources told Business Line that investment in the assets of the two Australian companies were long term and would require further graded infusion. While the production of coking coal assets needed to be scaled up to bring down cost, the iron ore exploration projects required sustained funds flow.