Wuhan Iron and Steel Group Corp. signed an agreement to buy 40 percent of the stakes of the Zambeze coal mine in Mozambique, which is owned by the Australian-based Riversdale Mining Ltd., according to reports Thursday.

The purchase-which will cost Wuhan Iron $800 million- will give the company possession of 8 percent-stake of the Australian developer at prices of about $8.6 per share, according to their agreement. The deal was approved by the National Development and Reform Commission (NDRC) .

Wuhan will make full use of the coking coal resources in Mozambique to guarantee basic production demand for its companies in Guangxi Zhuang Autonomous Region and Brazil, the companies disclosed.

Global coking coal supply has shrunk in recent years, which is forcing international steel enterprises to speed up overseas acquisitions in order to catch up with their domestic steel demands. And China is of no exception.

Currently, about 25 percent of all coking coal used in China is brought from overseas. The country is also bound to seek for more coal resources overseas as domestic need grows faster, said an insider.

But there are still concerns over overseas coal purchasing. China may have less say on international iron ore price if it furthers dependence on overseas resources.