South Korea's Hyundai Steel said on Wednesday it will buy a maximum of 300,000 tonnes of coal per year from Siberian Anthracite of Russia from 2010 for five years to feed its steel capacity expansion.
Both firms have signed a memorandum of agreement for the supply deal in Novosibirsk, Russia, a company spokesman said.
Another South Korean steel maker, POSCO, also signed a five-year contract on Wednesday to buy 1 million tonnes of coking coal and coal products per year from another Siberian miner, Sibuglemet, Interfax news agency reported.
The POSCO contract will also run from 2010, Interfax said.
Hyundai Steel is investing 5.84 trillion won ($5.61 billion) to build its first blast furnace to produce 8 million tonnes of steel annually.
The steel project, set to start operations in 2010, will boost output from the country's second-largest steelmaker by 60 percent.
For this expansion, Hyundai Steel late last year said it would buy 8 million tonnes of coking coal from BHP Billiton for five years, and reached similar deals with Canada's EVCC and Australia's Rio Tinto and Wesfarmers.
Russia's largest miner of coking coal for the steel sector, Mechel, in February agreed to supply up to 300,000 tonnes per year of the fuel to Hyundai Steel.
SourcE: Reuters
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