by Sarah Anderson
AK Steel has announced that the company has reached an agreement to purchase metallurgical-grade coke from SunCoke's Haverhill facility. Under the twelve-year agreement, which has two five year renewal options, SunCoke will provide AK Steel with up to 550,000 tons of coke annually, as well as financial benefits from the electricity co-generated from the heat recovery coke battery. Neither company disclosed the specific financial terms of the agreement.
"This agreement furthers our strategic goal to better insulate the company from volatile world market prices of our key commodity and energy inputs. The Haverhill agreement enhances our long-term supply of cost-competitive coke and energy in the most environmentally responsible fashion," James L. Wainscott, chairman, president, and CEO of AK Steel said in a statement released on Thursday.
According to a press release from AK Steel, the agreement does not replace nor diminish the company's need for the coke and electricity from SunCoke's proposed Middletown Coke Company. Both AK Steel and SunCoke fully support the Middletown Coke Company project which received its draft permit-to-install from the Ohio Environmental Protection Agency (OEPA) on July 27, 2009. The $340 million coke plant, located off Yankee Road in Middletown, has been put on hold for almost a year due to a number of lawsuits following the original permit issued by OEPA in November of last year.
AK Steel also said that while it has no plans to idle its existing coke-making capacity, the growing costs associated with environmental compliance and age are cause for concern regarding the company's Ashland coke batteries.