POSCO to build FINEX steel mill in Iran

POSCO Group will construct an integrated steel mill in Iran by using FINEX, its new steel-making technology.

At the Korea-Iran Business Forum jointly hosted by the Korea International Trade Association and the Korea Trade-Investment Promotion Agency (KOTRA) in Teheran on Monday, POSCO signed a memorandum of understanding with Iran's Pars Kohan Diarparsian Steel (PKP), to build an integrated steel mill capable of producing 1.6 million tons of steel annually.

Under the agreement, POSCO will transfer its POSCO innovative steelmaking technology, or POIST, to its Iranian partner and receive royalty. POIST is a combination of FINEX and compact endless cast and rolling mill technologies. POSCO will invest 128 million U.S. dollars, or 8 percent of the total investment amounting to 1.6 billion dollars. POSCO will launch the construction of the 1.6 million-ton steel mill next year, and build an additional facility in 2019 to produce 600,000 tons of cold-rolled coils and galvanized steel sheets annually.

POSCO Energy, the steelmaker's power generation unit, has signed a memorandum of understanding to build and operate a 500 megawatt power plant using excess gas and a desalination facility with POSCO E&C, Korea Electric Power Corporation (KEPCO) and PKP. After producing electricity using excess gas generated by the envisioned steel mill, POSCO Energy will use it to operate a 60,000 ton desalination facility on a daily basis. POSCO E&C will be in charge of building the desalination facility while POSCO Energy and KEPCO will be taking the responsibility of operation.

"This will act as a springboard to gain private power projects in Iran's power market where a massive 30 gigawatt power facility expansion is expected within five years," a POSCO Energy source said.

강유현기자 yhkang@donga.com