POSCO expects Chongching steel plant to break ground next month

POSCO, South Korea’s largest steelmaker, is expected to start building a steel plant in Chongqing, China, as early as next month, reports said Monday.

“Chinese Vice Premier Wang Yang has vowed to approve the construction of the project as soon as possible. We could receive an authorization next month, at the earliest,” POSCO chairman Kwon Oh-joon told reporters after a meeting with Yang in Seoul on Saturday.

But a POSCO spokesperson stressed that nothing had been fixed yet, saying the chairman was just hoping for a quick approval.

If the Korean company gets an approval from the Chinese government, the construction will start in four years after POSCO and Chongqing Iron & Steel Group signed a memorandum of understanding to set up a FINEX steel mill with an annual production capacity of 3 million tons.

In July, the two firms agreed to invest $3.3 billion in a 50-50 joint venture.

FINEX is POSCO’s self-developed technology that processes fine ore and non-coking coal to make high-quality steel at significantly lower cost.

The firm claims the production process is more environmentally friendly, as it uses less sulfur and nitrogen than conventional blast furnaces.

By Suk Gee-hyun (monicasuk@heraldcorp.com)