Hyundai Motor Group Executive Vice President Han Seok-won (left), Head of the Corporate Planning & Coordination Office, and POSCO Holdings President Lee Joo-tae, Head of the Future Strategy Office, hold up the agreement after signing a “Business Agreement for Mutual Cooperation in the Steel and Secondary Battery Sectors” at Hyundai Motor’s Gangnam-daero office building in April this year.
POSCO Group and Hyundai Motor Group will jointly build an electric furnace steel mill in Louisiana, United States, with a total investment of USD 5.8 billion (approximately KRW 8.55 trillion), capable of producing 2.7 million tons per year.
POSCO Holdings announced in a disclosure on the 16th that “to respond to the North American steel market and secure a base for eco-friendly automotive steel sheets, the company will invest jointly with Hyundai Motor Group to construct an integrated electric furnace steel mill in the state of Louisiana in the United States.”
Accordingly, POSCO Holdings plans to invest a total of USD 582 million (approximately KRW 858.6 billion) to establish a special purpose company (SPC), and then, through this company, invest in a 20% stake (USD 580 million) in Hyundai Steel Louisiana to participate in the construction of the steel mill. The remaining equity structure will consist of Hyundai Steel holding 50% (USD 1.46 billion) and Hyundai Motor 15% (USD 440 million).
The electric furnace steel mill that Hyundai Steel is building in Louisiana will feature a system that directly connects the direct reduced iron production facilities to the electric furnace for direct feed of raw materials. The companies expect that this will improve energy and transportation efficiency, increase the use of direct reduced iron, and enable the production of high-grade sheet products such as automotive steel sheets.
With this investment, POSCO will secure, together with Hyundai Steel, an electric-furnace-based production base in the United States, overcoming tariff barriers and establishing a foothold for the stable supply of low-carbon steel products to North and Central American markets, including the United States and Mexico.
Lee Won-joo
AI-translated with ChatGPT. Provided as is; original Korean text prevails.
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