New Coke and Energy Supply Agreement for AK Steel
09/04/2009 - SunCoke Energy will provide AK Steel with metallurgical-grade coke from its Haverhill facility in southern Ohio. AK Steel also secures a financial interest in the electricity co-generated from the heat recovery coke battery.
SunCoke Energy, Inc. will provide AK Steel with metallurgical-grade coke from its Haverhill facility in southern Ohio.
The agreement has a 12-year term with two five-year renewal options. Under the agreement, AK Steel will receive up to 550,000 tons of coke annually from SunCoke Haverhill, as well as a financial interest in the electricity co-generated from the heat recovery coke battery. Terms of the agreement were not released.
AK Steel says the agreement does not replace nor diminish the company's need for the coke and electricity from SunCoke's proposed Middletown Coke Company project. That project received a draft permit-to-install from the Ohio Environmental Protection Agency in July. The two companies continue to support the project.
AK Steel has no immediate plans to idle any of its existing cokemaking capacity as a result of either the Middletown Coke Company or Haverhill agreements, but the company did express concern about the age and escalating environmental compliance costs associated with its Ashland, Ky., coke batteries.
"This agreement furthers our strategic goal to better insulate the company from volatile world market prices of our key commodity and energy inputs," said James L. Wainscott, Chairman, President, and CEO of AK Steel. "The Haverhill agreement enhances our long-term supply of cost-competitive coke and energy in the most environmentally responsible fashion."
AK Steel operates coke batteries in Middletown, Ohio, and Ashland, but must purchase some of its coke requirements on the open market.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets. The company employs about 6000 in Middletown, Mansfield, Coshocton, and Zanesville, Ohio; Butler, Pa.; Ashland, Ky.; Rockport, Ind.; and its corporate headquarters in West Chester, Ohio.
