Australia's BlueScope Steel Ltd. has entered into an agreement to purchase coal from the state-owned Solid Energy New Zealand Ltd. for supplying its biggest mill in New Zealand.

Solid Energy will supply 770,000 tpy to BlueScope's New Zealand Steel Ltd. Base prices will boom up about 40 percent from previous year, with quarterly adjustments based on a basket of New Zealand and Australian cost indexes.

It is reported that the contract gives New Zealand Steel the first option over an additional 10-year coal supply. As part of the agreement, Solid Energy will invest more than US$54 million to extend the Huntly East mine