JSW Steel terminates coal block development agreement for Banai and Bhalumuda block

Steelmaker JSW Steel Ltd on Friday (November 8) announced the termination of its Coal Block Development and Production Agreement for the Banai and Bhalumuda coal block in Mand-Raigarh, Chhattisgarh. The Ministry of Coal’s Nomination Authority issued the termination order on November 7, 2024.

"...we now hereby inform you that the Coal Block Development and Production Agreement entered into by the company in respect of the said Block has been terminated by the Nomination Authority, Ministry of Coal, vide Order dated 07.11.2024," according to a stock exchange filing.

The decision follows an earlier designation of JSW Steel as the "Preferred Bidder" for the coal block in an auction process, as announced on March 29, 2023. However, after completing a detailed feasibility study, JSW Steel found the project unsuitable from a techno-commercial perspective, prompting the company to forgo further investment in developing the coal block.

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JSW Steel reported a net profit of ₹404 crore for the September quarter, compared to the ₹2,773 crore that it reported during the same quarter last year. The bottomline slided 85% on a year-on-year basis. The company reported a one-time loss of ₹342 crore on surrender of one mining lease. For the quarter, revenue stood at ₹39,684 crore as against ₹44,584 crore.

The topline was below CNBC-TV18's poll of ₹41,847 crore. The topline missed on weak prices. JSW Steel's operating profit or EBITDA stood at₹5,437 crore, as against CNBC-TV18's estimate of ₹4,642 crore. Margin came in at 13.7%, compared to CNBCTV18's poll of 11.1%.

Shares of JSW Steel Ltd ended at ₹996.85, up by ₹6.80, or 0.69% on the BSE.

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