POSCO made an early extension to its contract with Rio Tinto of Australia for the supply of iron ores, securing the stability of its ironmaking capacity.

POSCO's contract with Rio Tinto, the world's 2nd best iron ore supplier, enables the purchase of iron ores for the next 10 years. On August 25 in a meeting held in Perth, Australia, Senior Vice President Young-Tae Kwon and Mr. Ian Bauert, an executive of marketing from Rio Tinto, signed a renewal for the initial 15-year contract and made a promise to maintain their future partnership.

The contract means that POSCO has achieved a stable supply of 128 million tons of iron ore from Rio Tinto for 10 years starting from April 2007 to March 2017.

POSCO's strong partnership with Rio Tinto began with the first contract between the two companies in 1973. The partnership was enhanced when POSCO and Rio Tinto succeeded in managing the coal mine in MT. Thorley Australia in a joint venture in November 1981.

Prior to extending their contract with Rio Tinto, last November POSCO made a contract with CVRD of Brazil to purchase 103 million tons of iron ores for 10 years, and also established an MOU with BHP Billiton of Australia last December to extend the contract to purchase 125 million tons of icon ores for 10 more years.

As the market demand for steel components has been increasing rapidly all over the world, particularly in China, the price of raw materials for steelmaking - namely iron ores and coking coal - has reached record highs, greatly intensifying the competition among steelmakers.

In Standard and Poor's recent evaluation of global steelmakers and their level of competitiveness, they stated that the supply of raw materials would be the greatest variable to decide the future of the steel industry.

They also pointed out that securing a stable supply of raw materials would be the key to survival.