Signing of a Long-term Coke Transaction Agreement with Mitsui Mining

Nippon Steel Corporation (president: Akio Mimura； hereinafter ”Nippon Steel”) and Mitsui Mining Co.， Ltd. (president: Taro Yamaho； hereinafter ”Mitsui Mining”) have signed a long-term agreement under which， essentially， Mitsui Mining will put back into operation a now dormant coke-oven battery (Battery-1A with a capacity of about 500，000 tons/year) to manufacture metallurgical coke， the entire quantity of which will be purchased by Nippon Steel for a period of ten years.

Of the four coke-oven batteries in possession of Mitsui Mining， one (1A) has been out of operation since December 1988， but with the long-term transaction with Nippon Steel as security， Mitsui Mining is going to borrow funds for equipment spending from banks and reactivate Battery-1A to manufacture about 500，000 tons a year of metallurgical coke， selling the entire quantity produced to Nippon Steel. As a result， Mitsui Mining’s coke production capacity will expand from about 1.6 million tons/year to about 2.1 million tons/year.

This Agreement is characterized by the reactivation of a dormant facility， making it possible to start production within a comparatively short period of time， and the utilization of existing infrastructure to permit reduction of fixed costs and other expenditures. All this is expected to enable Nippon Steel to secure stable supplies of competitive coke within short lead-times， while doing much to the invigoration of Mitsui Mining’s core business of coke manufacture.

Nippon Steel has been purchasing coke from outside， chiefly imported coke. Since last year， problems in both price and quantity have aggravated difficulty in importing coke on a sustained basis， but the long-term arrangement now signed with Mitsui Mining will secure stable procurement.

Nippon Steel and Mitsui Mining， which have already long built up close business relations through the purchase and sale of coke and coke-oven gas， anticipate that the ties will be further reinforced by this transaction.

(Reference) Outline of Battery-1A
・ Location: On the premises of the Kitakyushu Plant of Mitsui Mining (Wakamatsu-ku， Kitakyushu City， Fukuoka Prefecture)
・ Starting date of operation: January 1973
・ Date of suspension of operation: December 1988
・ Number of coke ovens: 46
・ Production capacity: approx. 500，000 tons/year

Please direct inquiries to: Mr. Nakashima， Public Relations Center， Nippon Steel
Tel: (03) 3275-5023