Mumbai: Close on the heels of ArcelorMittal raising its stake in Australian coal mining  company Macarthur to 19.9 per cent, South Korea's Posco has agreed to buy a 10-per cent stake in Macarthur from the group's founder-shareholder Ken Talbot.

Posco, the world's fourth-largest steel maker, will pay A$20 a share or A$420 million ($404 million) for the 10 per cent stake, thereby also effectively blocking a possible takeover of the mining company.

The price is an 11 per cent premium to Macarthur's last week's closing share price of A$18 and matches the $20 a share paid by ArcelorMittal for the additional five per cent it bought.

ArcelorMittal's investment in Macarthur, which supplies steel mills with more than a third of the world's pulverised coal, now totals A$843 million.

The deal makes Posco the third largest overseas investor in the Australian miner after ArcelorMittal and China's CITIC Resources Holdings.

ArcelorMittal has a 19.9 per cent stake in the Australian coal miner while China's  CITIC Resources Holdings has a 17.66 per cent stake in Macarthur.
Reports had earlier speculated that ArcelorMittal may go for full control of Macarthur. 

POSCO said the acquisition was purely to secure raw material supplies and was not for investment gains and that it had no immediate plans to raise its investment in Macarthur.

Posco aims to boost self-sufficiency in raw materials such as iron ore and coking coal from around 20 per cent to 30 per cent by 2012 by investing in mining projects.

Luxembourg-based ArcelorMittal had also said its acquisition of Macarthur stake was in line with its strategy of securing raw material supplies.

China's state-owned CITIC Resources Holdings had last month said it may sell its 17.66 per cent stake in Macarthur, raising speculation of a full takeover bid for Macarthur.

Under Australian takeover rules, a shareholder wanting more than 19.9 per cent stake in a company must make a full takeover offer. The acquirer also has to obtain more than 90 per cent of its target in order to trigger compulsory acquisition of the remaining outstanding shares.

Driven by soaring coal prices, tight supplies and rising demand, overseas steel makers are vying for larger stakes in Australian coal and iron ore mines for securing long-term raw material supplies.

China's aluminium group Chinalco along with Alcoa had offered to buy a $14-billion stake in Rio Tinto, also an acquisition target of Australia's BHP.