SHANGHAI Cliffs Natural Resources Inc. has entered into a long-term agreement to supply AK Steel Corp. with iron ore pellets for 10 years starting in 2014.
The contracted volumes will be sold at annual prices determined by a formula-based pricing mechanism, Cliffs said Aug. 27. The minimum and maximum prices were not disclosed.
"The annual price is adjusted by multiple factors, including seaborne pricing for iron ore and certain producer price indices," said Cleveland-based Cliffs, which will continue to supply AK Steel with iron ore pellets for the remainder of 2013 and 2014 under the companies previous 1.5-million-tonne-per-year agreement.
Cliffs iron ore supply agreements with its largest customer, Luxembourg-based ArcelorMittal SA, will expire in 2015 and 2016, while its 15-year supply agreement with its second-largest customer, Sault Ste. Marie, Ontario-based Essar Steel Algoma Inc., will end in 2016.
Both West Chester, Ohio-based AK Steel and Essar Steel are developing new U.S. iron ore supplies, reducing their dependence on third-party iron ore.
A version of this article was first published by AMM sister publication Steel First.