POSCO, South Korea’s largest steelmakers, says it will actively pursue overseas investments in raw material assets as the costs of coal and iron ore become higher.
CEO Chung Joon Yang told shareholders that “the company will pursue investments in overseas mines more aggressively to secure raw materials.”
With iron ore contract prices up by around 40 per cent and even greater increases mooted for coal, steelmakers face escalating costs as the industry looks set to recover after the global recession.
“Economies at home and abroad are on a recovery path now, but the outlook for a full recovery is uncertain,” Mr Chung said today. “We expect competition among steelmakers to increase.”
The company is planning to buy a stake of as much as 15 per cent in the Roy Hill project in Australia to add to the 16.7 per cent stake POSCO bought in Jupiter Mines last year. POSCO also has a 10 per cent stake in Queensland’s Macarthur Coal.
POSCO has also bid for a stake of as much as 68 per cent in Korean trading firm, Daewoo International.
The company plans to spend as much as $8 billion in capital spending in 2010, almost double its spending last year. The company is also looking to expand overseas with as much as $30 billion earmarked for expansion into India, Indonesia and Vietnam. “We will go ahead with overseas mill plans in countries including India and Indonesia in order to strengthen the company’s status as a global player,” Mr Chung said.
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