Oct. 02, 2009

Expected to meet the Industry Demands with Increased Competitiveness



POSCO will join in on the development of titanium material, a high quality nonferrous metal, in Kazakhstan.



Chairman Joon-yang Chung signed an MOA to establish a join venture for producing titanium slabs with Kazakhstan`s UKTMP on September 29th, and has agreed to fully cooperate in the project at the meeting with the Prime Minister of Kazakhstan, Karim Massimov.



Chairman Joon-yang Chung commented, ``Kazakhstan has high potential for the development of natural resources, and following this joint titanium project, POSCO will continue to cooperate in developing Kazakhstan`s natural resources and infrastructure.``



Prime Minister Karim Massimov of Kazakhstan has expressed ``deep trust and gratitude towards POSCO for the joint project`` and has commented that ``the government of Kazakhstan will fully support POSCO for future SOC and raw material development projects.``



According to the MOA, POSCO and UKTMP will each invest 50% towards the construction of titanium slab production facility in the Ust-Kamenogorsk region, located in the eastern region of Kazakhstan.

UKTMP will provide the raw material: titanium sponge (titanium ore processed into sponge form), and the titanium slabs produced at the co-invested facility will be brought to Korea to be manufactured into sheets at the hot-rolling mill, and stainless steel rolling mill, at Pohang Steelworks.



Titanium is a high-quality, lightweight, non-ferrous material with strong corrosion resistant properties especially to salt water (sea water), and high mechanical properties. This allows many applications possible, for example in shipbuilding, nuclear power generation, desalination and chemical plants, aircraft engines and frames. Its price is more than 10 times that of steel at 40~50 million KRW per ton, and so far Korea has been relying entirely on imports for its titanium supplies as there were no local production facilities available.



This joint project will allow Korea to establish its own integrated titanium sheet facility, and will become the fourth country in the world in possession of such facility after Japan, Russia, and USA. It is expected that the replacement of imported Japanese products will be possible, while also strengthening the competitiveness in the domestic titanium market by reducing the delivery time and stabilizing the market price.

POSCO has been conducting titanium rolling tests using the existing facilities since September 2008, and has secured the necessary core technologies to ensure product quality. Also commercial production tests and product evalutions have been completed in cooperation with the potential customers.



POSCO will complete the necessary technical developments by the first half of 2010, and will start the commercial production in the second half, targeting the domestic market as well as customers in China, Europe and other overseas regions.



Sang-wook Oh

(Data : Investment Business Group)