JSW Infra in $150 m Chile port plan

JSW Infrastructure, part of the JSW group, plans to spend $150 million to develop a port in Chile which will have a cargo capacity of 30 million tonne per year, BVJK Sharma, joint managing director and CEO, JSW Infra, told DNA.

“We are awaiting clearance from the Chilean government and the process is on. If the government approves and the iron ore business picks ups then we will start developing a port there,” Sharma said. The company plans to raise funds through a 3:1 debt, equity ratio for the project, though the plans may change.

“The equity component for the Chile port may increase if revenue generation at existing ports rises or the company goes for value unlocking,” he said. Sharma said initial public offering of JSW Infrastructure was also an option but declined to put a timeframe to it.

He said that the iron ore shipment from JSW Steel’s Chilean mine to India will form a sizeable chunk of the cargo handled at the port. “Apart from iron ore, we are looking at shipping other cargo such as copper, agri-products from the port. But this is a long-term plan and depends on when the steel market revives.”

JSW Steel, the group’s flagship company, during the fiscal ended March 31, 2008 acquired 70% stake in Santa Fe Mining. The company has carried out the exploration activities to determine the quantity and quality of reserves and plans to set up a beneficiation plant in Chile, and has lined up $500 million to develop the mines.

Sajjan Jindal, vice-chairman and managing director of JSW Steel, in 2008, had said, “Over the next three years, we plan to produce 20 million tonne of iron ore annually and will have to invest another $500 million for that.”

However, following the crash in the commodity prices, including iron ore, JSW Steel slowed down the mine development in Chile. In its annual report, the company said, “This project will be taken up after the visible signs of recovery are established in the international steel market.”

Sharma said that JSW Infra is looking at developing ports in six other locations in India including one each in Tamil Nadu and Karnataka. He, however, said that company has no plans to raise any money for the next six months. “In another six months things will be clearer as to how much money needs to be spent on which project etc.”