POSCO has forged agreements with African partners to spur its move to develop natural resources in the region, the world’s No. 4 steel producer said Sunday.
During a week-long visit that ended Saturday, chief executive Chung Joon-yang agreed to jointly develop an iron ore mine in Cameroon, a company statement said.
The Mbalam mine is expected to annually produce about 35 million tons of high-quality iron ore starting 2014 from a prospective reserve of 200 million tons, it added.
The Pohang, North Gyeongsang Province-based steelmaker also won a package deal with the Democratic Republic of Congo to consider jointly developing a copper mine and helping build hydropower plants in the African country, POSCO said.
POSCO CEO Chung Joon-yang
In Zimbabwe, POSCO will launch a mining venture with local firm Anchor Holdings as early as the first half of the year to develop chrome, coal, iron ore, nickel and other raw materials.
Further, it has agreed to jointly develop a coal mine in Tete province of Mozambique with Vale SA, the world’s second-largest miner based in Brazil.
The region has the world’s largest untapped coal reserves estimated at 2.4 billion tons, POSCO noted.
Chung also met with Ethiopian Prime Minister Meles Zenawi and signed an agreement for economic collaboration that consists of research and development, mineral exploration and infrastructure development.
Africa has drawn considerable attention from developers around the world with its abundant natural resources and high growth potential. Korea is competing with rivals like China and India to obtain more resources amid soaring raw material prices.
POSCO has been pushing to buy coal and iron ore mines in Australia, Canada, Brazil and other countries in a bid to secure stable supplies for its steel-making operation, while raising its self-sufficiency rate in raw materials to 50 percent by 2014.
The ratio stood at about 18 percent last year, far below the world’s top steelmaker Arcelor Mittal’s 46 percent, Nippon Steel Corp.’s 25 percent and Tata Steel Ltd.’s 100 percent for iron ore and 50 percent for coking coal.
In June, Chung visited South Africa, Zimbabwe and Mozambique to discuss business opportunities for coal mines.
POSCO acquired a controlling stake of Daewoo International Corp. in August for 3.37 trillion won ($3.03 billion), which has been developing overseas resources since 1992.
The Korean trading firm holds stakes in six foreign mineral development projects and nine oil and gas projects.
Daewoo’s vice chairman and chief executive Lee Dong-hee accompanied Chung on the trip to Africa, POSCO said, encouraging Daewoo’s eight local units to support potential projects for the two companies in the region.
By Shin Hyon-hee (email@example.com