China Steel to invest in Australia mine

Taiwan-based China Steel Corp., a steel manufacturer, has approved a plan to invest about AU$102 million (US$110 million) in an Australian coal mine. It will pay AU$50 million for a 10% stake in the MDL 162 coal mine, which is located in Queensland and owned by Australia's MCG company.

In addition, the Taiwanese company is believed to spend AU$52 million on new facilities and other capital expenditures. The deal is expected to yield an annual 600,000 tonnes of furnace coal for China Steel, which plans to ship it back to the island for use there.

The steelmaker, who has investments in Australia, Brazil and South Korea, has been exploring overseas opportunities in a bid to boost supply amid growing demand.

In 2009, China Steel paid US$95 million for a stake in Brazil's Namisa SA, its first investment in a foreign iron ore miner. China Steel imports about 20 million metric tonnes of iron ore every year mainly from Australia and Brazil. Earlier reports indicated the company was planning to spend about US$2.5 billion over the next few years on stakes in overseas coal and iron ore mines.