Reports indicate that JSW Group, an Indian steelmaker, is vying to acquire two coking coal mines from Australia's BHP Group. This potential deal, estimated to be worth $1.5-2 billion, aims to secure resources to fuel JSW's blast furnaces. The mines in question, Daunia and Faunus, possess a combined capacity of 20 million tonnes per annum (MTPA) and are located in Queensland. BHP's decision to sell these mines comes in the wake of a 32% drop in half-year profit, dissatisfaction with the state's coal royalty increase, and growing environmental and governance concerns.Of the total capacity, 15-16 MTPA is dedicated to coking coal, essential for steel production, while the remainder is thermal coal. JSW is currently the sole Indian company participating in the bidding process, competing against global players like Nippon Steel, Posco, and Glencore. Other contenders include local mining groups Yancoal and New Hope Corp, along with various private equity firms. Non-binding indicative bids are expected to be submitted in the coming weeks.While JSW has refrained from commenting on these speculations, analysts suggest the possibility of the company forming a consortium by partnering with a private equity group. BHP, in collaboration with its Japanese partner Mitsubishi, has also decided to sell the Blackwater mines, which are part of their joint venture BHP Mitsubishi Alliance in Queensland.This divestment plan follows BHP's previous sale of its 80% stake in the BHP Mitsui Coal (BMC) joint venture to Australian firm Stanmore in May 2022. The Hay Point port facility near Mackay, owned by the joint venture, has a capacity of 55 MTPA but only exported 46.3 MTPA in 2022.BHP stated its intention to divest these assets to an operator who would prioritize the necessary investments for their continued successful operation. The company aims to maximise the value of these assets through a trade sale. As steel companies worldwide strive to decarbonize and explore alternative fuels such as hydrogen and natural gas for their blast furnaces, coking coal remains an indispensable component.The quality of coking coal directly impacts emissions and energy intensity, making the usability of Australian coking coal a crucial consideration. High-grade coals enable more efficient blast furnace operations, thereby reducing carbon intensity. For companies like JSW, freight costs from Australia will also be a significant factor in their decision-making process.Despite the global recession, coking coal prices in Australia have been steadily rising, especially after China lifted the unofficial ban on sourcing from the country, which had been imposed in 2020. In January, China resumed purchasing coking coal from Australia, with 1.4 million tonnes loaded onto 14 ships.