Taiwan's largest steel producer, China Steel Corp, on Tuesday announced it is poised to dispense some $110 million or AU$102 million to buy the share of output rights at the MDL 162 coal mine site in the northern state of Queensland, Australia.
Global miner BHP Billiton announced it will be shutting down the Gregory Crinum open-pit coal mine near Emerald, Queensland, where 300 jobs will be affected. Coal mining firm Xstrata Plc, meanwhile, will likewise reduce off 600 jobs, including office-based positions in Sydney.
In a statement released on Tuesday, China Steel Corp said it will pay AU$50 million for a 10 per cent stake in the coal mine, plus another AU$52 million on new facilities and other capital expenditures.
The planned investment will help enable China Steel Corp to secure an annual output of 600,000 tonnes of metallurgical coal once the site is completed and online sometime in 2016. The coal will be shipped back to the island for domestic consumption purposes, the company statement said.
The Taiwanese steelmaker has been exploring opportunities overseas to improve and increase supply amid growing demand. It has strategic investments in Australia, Brazil and South Korea. In 2009, China Steel made its first investment in a foreign iron ore miner in Brazil's Namisa SA, paying $95 million for a stake control in the mining firm.
China Steel Corp imports 20 million metric tonnes of iron ore annually from Australia and Brazil.
Earlier reports said China Steel Corp plans to spend some $2.5 billion to acquire stakes in overseas coal and iron ore mines over the next few years.
Meanwhile, the Taiwanese steelmaker announced it will increasedomestic April-May prices of steel by an average of 1.11 per cent, its first in five months, prompted by a global recovery in steel prices as well as relaxed financial conditions in China, which happens to be one of Taiwan's top export markets.
China Steel last imposed a hike in the local prices during the October-November period by 1 per cent from September.
The company sells about 75% of its output locally and exports the rest, mostly to China and Japan.
The company will increase prices of hot-rolled sheets and coils by NT$500 or $16.90 from those of March. Prices of cold-rolled sheets and coils will likewise hike by NT$350, Dow Jones reported.
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