Partnership is a strategy to counter US trade barriers

South Korea’s POSCO has agreed to acquire a 20% stake in Hyundai Steel’s new steel mill in the US, according to the Maeil Business Newspaper.

According to a document submitted to the country’s Financial Supervisory Service, POSCO Holdings will invest 858.6 billion won ($582 million) in the EAF plant project in Louisiana, led by Hyundai Steel.

The total cost of the project is $5.8 billion, which is one of the largest foreign investments by Korean companies in the steel sector.

Half of the funding will be provided by four participating companies: Hyundai Steel, which will become the largest shareholder (50%), Hyundai Motor and Kia (15% each), and POSCO (20%). The remaining funds will be raised through external borrowing.

This partnership is a strategy to counter US trade barriers. The Louisiana plant will have an annual production capacity of 2.7 million tons. The companies plan to supply high-quality steel products, including automotive sheet steel, to the North American market.

Earlier, it was reported that POSCO Holdings was selling its remaining stake in the Japanese company Nippon Steel. The South Korean steel producer is expected to receive more than 200 billion won (approximately $136.51 million) in additional cash. POSCO received 25.3 billion yen ($237.5 billion won) from the September sale of its shares in Nippon.

POSCO is expanding its investments in new areas of activity (secondary materials for batteries, hydrogen, etc.), so it continues to sell non-core assets. The sale of its stake in the Japanese company is also part of this strategy.