Feb22, 2012
TAIPEI (Reuters) - China Steel, Taiwan's top steel maker, said on Tuesday it will pay T$3.06 billion ($104 million) to invest in a coal mine in Australia and take rights to 10 percent of the future output, in a move to counter the impact of higher coal prices.
About half the amount will be used to buy the share of output rights at the MDL 162 site in the northern state of Queensland, while the rest will go on building facilities and on future development, China Steel said in a statement.
The investment will secure annual output of 600,000 tons of metallurgical coal for China Steel once completed in 2016, raising its owned coal supply to 7 percent from 3 percent of total supply, a spokesman said separately.
Falling demand for steel amid a global slowdown but higher prices of raw materials like coal have prompted China Steel and global rivals to try and seek their own supplies.
In December China Steel agreed to a 23 percent cut in iron ore prices and had earlier said it was seeking to delay some raw material deliveries.
Shares of China Steel ended flat before the announcement, versus a 0.42 percent slide of the broader market.
(sourced Reuters)
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