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Steelmaker, coke producer extend contract

Steelmaker, coke producer extend contract

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EAST CHICAGO | An Indiana Harbor-based coke plant will continue to furnish the world's largest steelmaker with a raw material it needs to forge metal in East Chicago.

ArcelorMittal and direct supplier SunCoke Energy Inc., have inked a 10-year extension of their contract. Under the agreement, SunCoke furnishes ArcelorMittal's integrated mills in East Chicago with 1.22 million tons of metallurgical coke a year. Coke is made from coal, and large amounts of it are mixed with iron ore in blast furnaces during the steelmaking process.

The coke, a critical ingredient in the blast furnace production of iron, is made at SunCoke Energy's cokemaking operation at Indiana Harbor in East Chicago. ArcelorMittal also operates two mills at the harbor, which is North America's largest steelmaking complex.

"This contract renewal affirms the strategic, long-term relationship we have with ArcelorMittal," said Fritz Henderson, chairman and chief executive officer of SunCoke Energy Inc.

"We are proud to supply more than 1.2 million tons of metallurgical coke from our Indiana Harbor plant to one of the most important steelmaking assets in North America. Extending this contract was a top 2013 priority for Suncoke, which, when coupled with our refurbishment efforts, positions Indiana Harbor well for the future."

The contract extension takes effect in October, and its key provisions are substantially similar to the current agreement, according to a news release.

Coal costs will be passed through to the steelmaker. The reimbursement of maintenance expenses will be subject to conditions. Price per ton of coke will reflect the $85 million in new capital that SunCoke is investing to refurbish its East Chicago cokemaking plant.

SunCoke, the largest independent producer of coke in the Americas, is upgrading its Indiana Harbor operation, which is its largest U.S. facility. The cokemaker, which is a direct supplier to integrated steel mills, owns about 85 percent of the East Chicago facility, which has 268 ovens and a capacity of 1.22 million tons of coke a year.

DTE Energy Co. holds a 15 percent ownership stake in the operation.

Upgrades should be completed sometime in early 2014, but the full financial effects will not be realized until the following year.


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