The world's third largest steelmaker said yesterday it will invest in a joint venture with an Australian coal producer to ensure a supply for steelmaking.

South Korea's POSCO announced it will pay 23 million U.S. dollars for a 10 percent stake that will operate Resource Pacific Holdings' Newpac mine in the Hunter Valley, New South Wales. Newpac has an estimated reserve of 252 million tons of high-quality coal and began operations in March 2001.

POSCO said it plans to buy 400,000 tons of coal from the mine next year, and 500,000 tons annually for the following four years. The price would be agreed upon annually.