Pohang, South Korea — MININGREVIEW.COM — 17 June 2010
South Korea’s largest steelmaker, Posco, has agreed to buy a 7.8% stake in a coal mine in Mozambique to secure supplies as raw material costs rise.
“The mine may supply Posco with 5 million metric tonnes of coal a year starting from 2014,” said company spokesman Chung Jae Woong, in a telephone interview here with Bloomberg News, confirming a Yonhap News report. He declined to give the value of the deal, the identity of the seller, or the type of coal the mine would supply.
CEO Chung Joon Yang said earlier this year that he would aggressively pursue mining investments, joining ArcelorMittal “’ the world’s largest steelmaker “’ in seeking to own supplies of raw materials. Contract prices for coking coal, used in steelmaking, are expected to rise 12.5% in the July quarter, the second gain this year, as Chinese demand drains global supplies.
Posco “’ which is planning to invest about US$5 billion (R37.5 million) in overseas mines “’ agreed earlier this year to buy as much as a 15% stake in the Roy Hill iron ore project in Australia.