SunCoke Energy (NYSE: SXC) and ArcelorMittal (NYSE: MT) have agreed to a 10-year extension of an existing contract where SunCoke provides 1.22 million tons of metallurgical coke annually to ArcelorMittal from its Indiana Harbor coke plant in East Chicago, Ind.
“This contract renewal affirms the strategic, long-term relationship we have with ArcelorMittal,” said Fritz Henderson, Chairman and CEO of SunCoke Energy, in a Sept. 5 statement. “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.”
Key provisions of the extension agreement, which takes effect Oct. 1, 2013, are substantially similar to the existing agreement, including continuing the pass-through of coal costs, reimbursement of operating and maintenance expenses subject to certain metrics and a pricing adjustment per ton of coke produced to recognize the approximately $85m in new capital being deployed to refurbish and upgrade this facility. SunCoke expects this refurbishment to be substantially complete in first quarter 2014, although certain equipment replacement with long-lead order times will not be fully implemented until early 2015.
The Indiana Harbor coke plant is SunCoke’s largest U.S. facility with 268 ovens and 1.22 million ton annual coke production capacity. It was the first commercial application of the company’s advanced heat recovery technology, having begun operations in 1998. SunCoke holds an 85% ownership interest in the Indiana Harbor operation with DTE Energy (NYSE: DTE) holding the remaining 15%.
SunCoke Energy is the largest independent producer of coke in the Americas, with 50 years of experience supplying coke to the integrated steel industry. Its U.S. cokemaking facilities are in Virginia, Indiana, Ohio and Illinois. Outside the U.S., it has cokemaking operations in Vitoria, Brazil, and Odisha, India. Its coal mining operations, which mostly supply a company coke plant in Virginia, are located in Virginia and West Virginia.