South Korean steel giant POSCO Group said on Wednesday it will consider investing 4.4 trillion won ($3.3 billion) in the state-run industrial complex in Gwangyang, where its major steel plant is located, by 2033 to boost new growth sectors such as rechargeable battery components and hydrogen.
The announcement came after Prime Minister Han Duck-soo said on the same day that Korea will lift regulations on state-backed industrial clusters to accelerate private investments.
Under the current rules, some industrial complexes can house only certain sectors to meet their original purpose of establishment. The complex in Gwangyang, on the southwest coast, has been only allowed to house steel-related industries.
“The government will focus on the speedy execution of investments. It will also complete the legislative preview in the first half of this year to revise the Enforcement Decree of the Industrial Sites and Development Act,” Han said on April 19 during his visit to POSCO’s Gwangyang Steelworks.
The government will expand the scope of “related industries” of the complexes’ original purposes to ramp up investments. Also, it will revise the Enforcement Decree to boost advanced industries and balanced regional economies.
UNUSED RECLAIMED LAND
POSCO has planned for investments in new growth sectors, such as battery materials, hydrogen production and lithium refining in reclaimed land facing the seawall around the Gwangyang Steelworks.
The steel giant has reclaimed sites of 5.4 million square meters to prevent erosion since 1989 and will complete reclamation of additional 2.2 million square meters by 2050.
POSCO's Gwangyang Steelworks (Courtesy of POSCO) POSCO International Corp., the general trading and energy exploration unit, is running a liquefied natural gas terminal of 510,000 square meters in the reclaimed land, to provide the resource to the Gwangyang Steelworks. Around half of the land is not used due to the Industrial Sites and Development Act.
“We expect that the government’s deregulation will drastically change the sites to maximize the synergy between steel and advanced industries. Our investment will create 9,000 jobs and a production inducement effect of 3.6 trillion won per year,” POSCO stated on Wednesday.
BATTERY COMPONENTS, HYDROGEN
POSCO is said to consider building plants to produce rechargeable battery ingredients and hydrogen and refine lithium.
According to the plan, POSCO Future M Co., formerly POSCO Chemical, is highly likely to set up facilities to manufacture anodes, cathodes and precursors, key materials for rechargeable battery that see growing demand in the global electric vehicles market.
Last year, the chemicals affiliate said it will build a cathode materials manufacturing plant to bulk up the capacity six times to 610,000 tons per year by 2030. The plant will be probably located on the reclaimed land, according to industry sources.
"POSCO Future M manufactured 90,000 tons at its Gwangyang plant, out of the 105,000 tons of entire cathode material production last year. It would be advantageous for the company to focus on the region to significantly increase the production,” a source said.
The group is also considering building hydrogen and ammonia supply chains. POSCO International is planning to set up infrastructure that produces, stores and provides the elements within its current LNG terminal.
POSCO Holdings Inc., launched in March of the last year, is speculated to set up a plant at the industrial cluster to refine lithium for cathode production. The holding company is importing lithium from Australia and Argentina to Gwangyang.
Write to Jae-Fu Kim and Hyung-Kyu Kim at hu@hankyung.com Jihyun Kim edited this article.
