JSW Steel will transfer its sponge iron unit at Salav village in Raigad, Maharashtra to its wholly-owned subsidiary JSW Green Steel, it said in disclosures filed with the exchanges on Tuesday.
JSW Green Steel was incorporated in February last year to set up a four million tonne per annum (MTPA) integrated green steel plant, as a part of its plan to reduce its carbon footprint.
Thus, JSW Steel said that it is carving out the Salav unit into JSW Green Steel and thereafter has plans to set up a green steel facility by expanding capacity from existing 0.9 MTPA to 4 MPTA in phases.
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The transaction will be initiated on Wednesday, and is expected to be concluded by March 31. The transfer will take place through a cash transaction, or issue of equity shares or convertible equity instruments by JSW Green Steel to JSW Steel amounting to Rs 2,233 crore, the exchange filing said.
“In line with the company’s strategy to set up a green steel plant in order to cater to the export requirements, manufacturing steel with low carbon emissions, the requirement to track the CO2 emissions separately and exploring new technology like green hydrogen usage for direct reduced iron (DRI) or sponge iron operations, it is proposed to transfer the existing Salav unit having DRI capacity of 0.9 MTPA along with its auxiliary units to JSW Green Steel,” JSW Steel said.
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