SunCoke Energy Extends Cokemaking Agreement with ArcelorMittal Indiana Harbor
09/09/2013 - SunCoke Energy, Inc. and ArcelorMittal have agreed to a 10-year extension of their existing contract, under which SunCoke provides 1.22 million tons of metallurgical coke annually to ArcelorMittal from its Indiana Harbor cokemaking operation located in East Chicago, Ind.
"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.”
Key provisions of the extension agreement, which takes effect 1 October 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 US$85 million in new capital being deployed to refurbish and upgrade this facility. We anticipate this refurbishment will be substantially complete in first quarter 2014, although certain equipment replacement with long-lead order times will not be fully implemented until early 2015. As a result, while we expect significant improvement in operating and financial results in 2014, the full impact of the refurbishment and contract economics are expected to be realized in 2015.
The Indiana Harbor cokemaking operation is SunCoke’s largest U.S. facility with 268 ovens and 1.22 million ton annual coke production capacity. This facility was the first commercial application of our advanced heat recovery technology, having begun operations in 1998. SunCoke holds an 85% ownership interest in the Indiana Harbor cokemaking operation with DTE Energy Company holding the remaining 15% interest.
SunCoke Energy, Inc. is the largest independent producer of coke in the Americas, with 50 years of experience supplying coke to the integrated steel industry. Its advanced, heat recovery cokemaking process produces high-quality coke for use in steelmaking, captures waste heat for derivative energy resale and meets or exceeds environmental standards. Its U.S. cokemaking facilities are located 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 have more than 110 million tons of proven and probable reserves, are located in Virginia and West Virginia.
