By Lorraine Luk

TAIPEI--China Steel Corp. (2002.TW) said Friday that it has dropped a plan to invest in an Australian coal mine owned by MCG after one of the mine's shareholders exercised priority rights to increase investments.

China Steel, Taiwan's biggest steelmaker by revenue, said in February that it approved an investment of $102 million Australian dollars (US$95.03 million) in the MCG mine--A$50 million to buy a 10% stake and A$52 million for capital expenditure.

Write to Lorraine Luk at lorraine.luk@dowjones.com