Posco, Hyundai Sign Mou for joint investments in 5.8 billion US dollars in Louisiana Steel Mill Project

Posco's cold rolled steel in steel maker system in Pohang, North Gyeongsang [POSCO]

The POSCO and Hyundai Motor Group signed a deal on Monday, in which the top steel manufacturer in Korea invests together in Louisiana's steel mill to secure the supply chains and work with carbon-neutral EV technology.

As part of the Memorandum of Understanding (MOU), POSCO will invest an unknown amount in the Hyundai engine steel factory that the car manufacturer recently announced that, according to Posco Holdings, he will use 5.8 billion US dollars for construction on Monday.

This is the entry of Posco to the United States, which was excluded through trade protectionism. The company currently does not operate steel production facilities in the country and supplies car manufacturers in the region via metal processing centers such as its work with car steel in Mexico.

POSCO expects the US location to deliver materials in the USA and Mexico efficiently, which gives the company the selection of flexible production and sales, the Steelmaker said in a statement.

The two groups also plan to work with the development of sustainable materials by incorporating the POSCO battery materials and environmentally friendly mobility technology from Hyundai Motor.

The two companies have discussed the agreement since last year in anticipation of the changing secondary battery market and to realize Posco's localization strategy on high steel markets in overseas, said Posco.

Managers, including the President of the Hyundai Motor Vice President Han Suk-Won and Posco Holdings President Lee Ju-Tae, were present in the MOU signs in the Hyundai motor offices on Monday.

“By using the synergy between the two companies, we find sustainable growth solutions in our entire business portfolio, including steel and secondary battery materials, under the global trade pressure and the paradigms of the industry,” said Lee in the company's explanation.

The chairman of the Hyundai Motor Group, Euisun Chung, announced in March that the company will invest 21 billion US dollars in US institutions, including the plant of Louisiana Stahl and Hyundai Motors Georgia as well as in initiatives for renewable energies and EV charge infrastructure in the USA to avoid potential tariffs and automotive tasks.

The Louisiana Electric Stahlwerk, in which POSCO will invest together, is planned to end the construction by 2029 and to have an annual production capacity of 2.7 million tons with a specialization in car steel slabs.

By Kim ju-yeon [[email protected]]