Dow Jones reported that Thai steel maker Sahaviriya Group expects to sign iron ore purchase agreements with three major producers in the third quarter of 2008 to secure raw material supply for its planned THB 90 billion (USD 1.5 billion) smelter.

Mr Win Viriyaprapaikit acting president of Sahaviriya Group said that Rio Tinto Ltd and BHP Billiton Ltd and Brazil's Vale do Rio Doce will supply a total of 8 million tonnes of iron ore a year to Sahaviriya Iron & Steel Co for at least seven years.

Mr Win said that Australian iron ore producers will provide around 70% of the total, with the balance from Vale. The iron ore price will be negotiated on a year on year basis.

Sahaviriya Iron & Steel plans to build Thailand's first smelter, with an annual capacity of 5 million tons a year. Mr Win said that the plant, which will take two years to build, is expected to start construction in the fourth quarter of this year.