The board of JSW Infrastructure Ltd. on Friday approved the purchase or transfer of an under-construction slurry pipeline from JSW Utkal Ltd. for Rs 1,700 crore. The company has also entered into a 20-year take-or-pay agreement with JSW Steel Ltd. for the transportation of iron ore.
The assets to be purchased pertain to a 30 MTPA underconstruction slurry pipeline project for the transportation of iron ore from Nuagaon mines to Jagatsinghpur in Odisha, according to an exchange filing. The transaction is subject to approval from shareholders and other regulatory approvals, it said.
The 20-year agreement is worth Rs 1,324 crore per annum and will be escalated annually. The take-and-pay quantity has been set at 18 MTPA.
The slurry pipeline project is part of an end-to-end logistic solution for iron ore transportation and offers a sustainable solution for the movement of iron ore. It also helps reduce transportation costs through rail transportation.
The company is expected to complete the transaction of JSW Utkal, the wholly owned subsidiary of JSW Steel, in six months.
Shares of the company closed 6.07% lower at Rs 315.70 per share. That compares to a 1.12% decline in the NSE Nifty 50.
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