Australian firm inks 20-yr coal supply pact with Bhushan Steel

Both the companies have entered into an agreement to this effect, under which Bhushan Steel would purchase 500,000 tonnes of thermal coal per annum for the first five years of production from the Boikarabelo mine and a minimum 500,000 tonnes per annum for a further 15 years.

In a regulatory filing to the Australian Stock Exchange, Resource Generation said the price will be at international market prices at the time of each shipment.|

"This is the second long-term export contract, demonstrating confidence in the quality of the Boikarabelo mine as well as its potential into the expanding Indian market," Resource Generation managing director Paul Jury said.

Bhushan Steel has operations in Delhi, Orissa and Mumbai and has a primary steel making capacity of around 2.5 million tonnes per annum, which is being expanded to 5 million tonnes per annum by October 2012.

Bhushan Steel's growth plan includes diversification into power generation through its subsidiary Bhushan Energy Limited, which already has installed capacity of 300MW.

The supply of coal from Boikarabelo is targeted for the expansion of Bhushan Steel’s power generation capacity, the filing added.