ArcelorMittal SA, the world's largest steelmaker, said Monday it would build a US$600 million steel mill in Mexico and buy a coking coal plant in the United States.

The company said it was still looking at potential sites for the Mexico mill, which will be able to turn out some 500,000 metric tonnes (551,000 tons) of carbon steel and bars every year for the car-making and construction sectors in the country.

It expects the new plant to supply the Mexican government's plan to upgrade infrastructure and build more housing.

ArcelorMittal also said it would pay US$160 million to buy the Koppers' Monessen Coke Plant from Koppers Inc to secure more of the fuel it needs to fire steel furnaces.

Wants more control of steel ingredients

The company buys all its coke from the facility in Monessen, Pennsylvania, but wants to gain more control of key steel ingredients - metallurgical coke and iron ore - as prices soar.

The steelmaker produces 10 per cent of global steel and currently supplies a fifth of its own coking coal. It wants to control at least three quarters of all its supply needs by 2015.

The price of coking coal has gone up 200 per cent since the start of the year, and ArcelorMittal said last week that it does not expect price levels to ease anytime soon.

The Koppers' plant turned out 320,000 metric tonnes (353,000) of coke last year and was built by the Pittsburgh Steel Co in 1941 and 1942.

In 2007 ArcelorMittal had crude steel production of 116 million tonnes, representing around 10 per cent of world steel output.

Its global sales topped US$105 billion in the same year.