posco AMERICA

-Steelmaker to join Brazilian steelworks project

POSCO on July 16 had an executive board meeting and decided to seek to purchase a 20 percent stake in a Brazilian steelworks project pursued together with Dongkuk Steel Mill and Vale.

The new facility, which is scheduled to open at the end of 2014, will produce 3 million tons of steel slabs a year. Groundbreaking for the upcoming production facility will be early next year.

POSCO, together with its construction arm POSCO E&C, examined the appropriateness of the project from last December through May.

By purchasing the stake, the company expects more than profits: Securing a stable supply base for North American markets and gaining a foothold to grow further in the fast-growing Brazilian market is a priority.

A strengthened partnership with Dongkuk Steel Mill, a strategic partner of Vale, the No. 1 supplier of iron ore in the world, will also bring more benefits to the steelmaker, a company officer predicted.

The three companies plan to discuss detailed investment conditions with each other in the next year to develop the business plan in more detail. After that, each of the three will have an executive board meeting to make a final decision for their participation in the project.

POSCO has been strengthening its ties with other Korean steel companies, in an effort to solidify its presence in overseas markets. Last year, it joined Seah Steel -- a Korean steel company specializing in the production of steel pipes -- and US Steel -- the largest U.S. steelmaker -- to found United Spiral Pipe, LLC. POSCO also opened an API plant in the city of Pittsburg, California, last November.

By Kim Jun-yeon
junykim@posco.com