The dispute was over 280,000 tonnes of premium coking coal, which had been contracted to purchase by Erdemir during the 2008-09 contract year at $US319 per tonne .

Under the settlement, Erdemir will accept delivery of all remaining carryover tonnes of coal between April 1, 2010, and March 31, 2011.

Prior to the disputed deliveries, Walter had already delivered half the original contract total of 560,000t and received payment in full for those tonnes at the original contract price.

"We are happy to have this issue resolved, and we look forward to continuing what has been a long and mutually beneficial relationship with one of our most important customers," Walter chief executive Victor Patrick said.