Suncoke and steel manufacturer ArcelorMittal renewed their contract for the sale of 1.22 million tons per annum of metallurgical coal from the Indiana facility to ArcelorMittal.

The contract represents the entire annual output of the cokemaking facility.

Suncoke said the terms of the agreement were “substantially similar to the existing agreement”

“Extending this contract was a top 2013 priority for SunCoke,” company chairman and chief executive officer Fritz Henderson said.

“This contract renewal affirms the strategic, long-term relationship we have with ArcelorMittal.

“We are proud to supply more than 1.2Mt of metallurgical coke from our Indiana Harbor plant to one of the most important steelmaking assets in North America.”

Suncoke said the agreement included continuing the pass-through of coal costs, reimbursement of operating and maintenance expenses subject to certain metrics and a pricing adjustment per ton of coke produced to recognize approximately $85 million in new capital being deployed to refurbish and upgrade the facility.

The Indiana Harbor cokemaking operation is SunCoke’s largest US facility with 268 ovens and 1.22Mtpa coke production capacity.

The facility was the first commercial application of the company’s advanced heat recovery technology, having begun operations in 1998.

A major refurbishment of the plant is underway and is expected to be “substantially complete” in the first quarter of 2014 “although certain equipment replacement with long-lead order times will not be fully implemented until early 2015”, Suncoke said.

“As a result, while we expect significant improvement in operating and financial results in 2014, the full impact of the refurbishment and contract economics are expected to be realized in 2015,” Suncoke added.

SunCoke holds an 85% ownership interest in Indiana Harbor with DTE Energy holding the remaining 15% interest.