Reuters reported that partners in Brazil's Ceara Steel project have opted to use coal for smelting instead of natural gas after a disagreement with state energy company Petrobras over gas prices delayed the project by a year.

Mr Roger Agnelli CEO of CVRD told reporters that "The integrated steel smelter will not use natural gas. That was the last debate we had for the past seven months."

The project had been based on projections of a daily supply of 1.2 million cubic meters of natural gas at prices Petrobras sells to Ceara state. However Petrobras has argued that all gas volumes under the old contract with the state have been used up and insisted on a much higher price.

The project is a joint venture shared by CVRD and South Korea's Dongkuk Steel had initially been scheduled to start in 2009.