Russia's Kuzbass-based coal producer Sibuglemet, Kemerovo regional administration and South Korean steel giant POSCO have signed a five-year coal supply agreement, under the terms of which POSCO will buy one million mt of coking coal and coal products per year from Sibuglemet starting from 2010.
Accordingly, the agreement in question is aimed at ensuring long-term coal deliveries to South Korea, and will help to secure new coal sale markets for the Kemerovo region. Currently, there are more than 12 million mt of coal lying in warehouses in this region.
Meanwhile, another South Korean steel producer, Hyundai Steel, has also concluded a coal supply contract with a Russian coal producer, Siberian Anthracite, according to which Hyundai Steel will acquire about 300,000 mt of coal per year during the next five years starting from 2010.
The contract in question is in line with Hyundai Steel's plans for the diversification of its sources of raw material, with a view to meeting the needs of its steel capacity expansion. As SteelOrbis previously reported, Hyundai Steel has currently two blast furnaces under construction, which are expected to commence production in January 2010 and April 2011 respectively. The commissioning of the new blast furnaces, with an annual capacity of four million mt each, will allow Hyundai Steel to compete with the country's largest steel producer POSCO in the auto sheet and shipbuilding plate markets.
In 2008, Siberian Anthracite mined three million mt of anthracite coal. In 2006, the company started the implementation of a seven-year investment program directed towards the increase of its production capacities to ten million mt per year.
As SteelOrbis previously reported, in February 2009 Mechel, one of the leading Russian mining and steel groups, and Hyundai Steel signed a long-term agreement for the supply of up to 300,000 metric tons per year of K-9 grade coking coal. Within the frame of this agreement, on June 9, 2009 Mechel Trading AG and Hyundai Steel signed a commercial contract, under the terms of which about 200,000 mt per year of coking coal will be supplied to the South Korean steelmaker during the next five years, starting from April 1, 2010.