POSCO to Invest $200 Mil. for Stake in S. African Mine

POSCO to Invest $200 Mil. for Stake in S. African Mine

By Jane Han
Staff Reporter
POSCO, Asia's third-largest steel maker, said Friday that it will invest $200 million to buy a 13 percent stake in a manganese mine in South Africa for a stable supply of the essential ore for steel and iron production.
The investment will allow POSCO to annually secure at least 130,000 metric tons of manganese, starting in 2010. This is about one-fourth of its annual need for the material used to harden stainless steel.
The South Korean steel giant said the purchase of the Kalahari mine will be made by joining an international consortium led by Pallinghurst, which owns 49.9 percent of the mine.
This is the first time for POSCO to make a purchase through an alliance.
According to POSCO, the Pallinghurst consortium will accelerate its investment in global raw material development projects to $1.5 billion by 2010, up from the current $600 million.
The steel group said that it would seek further global investment opportunities with Pallinghurst, a London-based mining investment group.
The latest decision comes after POSCO agreed to pay Brazilian miner Vale 65 percent more for iron ore this year, starting April.
Soaring raw material costs have squeezed steel makers to push up prices and hunt for more diverse suppliers around the world.
Most recently, the Pohang-based company signed a deal with a major U.S. mineral developer to explore a central Nevada mine, considered to have one of the world's largest deposits of molybdenum, a key raw material for high-end steel products.

jhan@koreatimes.co.kr

Summary
POSCO, Korea's first-largest steel company, will invest $200 million to buy a 13 percent stake in a manganese mine in South Africa for a stable supply of the essential ore for steel and iron production.
This is the first time for POSCO to make a purchase through an alliance.
Most recently, the Pohang-based company signed a deal with a major U.S. mineral developer to explore a central Nevada mine, a key raw material for high-end steel products.

Opinion
POSCO is a major company representing Korea's iron industry. Because of this reason, POSCO should prepare many competitive advantages to live in survival, and POSCO needs to have the relationship with the other foreign companies. To do well these processes, POSCO must get essential marketing strategies and its strategies should be considered by POSCO managers to fit it into world market and to attract investors. So, what are competitive marketing strategies in world steel market? I think POSCO should not only improve the plans to earn profit, but also its Images. The image of steel companies is 3Ds(Difficult, Dangerous, Dirty), so people pretend steel companies are not in a eco-system that takes the values considering the environment where people live in. POSCO is trying to change company's existing images to company that loves environment. POSCO's titles in its web sites are 'Innovation and Growth for Future Generations' and 'Sustainable Step toward Future Generations'. This movement will be helpful to change investor mind thinking 'Steel company does not have the eco-characteristics' and will lead them to invest POSCO. Another marketing strategy is to distribute their profits into people in Pohang. Actually, POSCO has earned high profits and Pohang people are thinking POSCO is the rich company in a local city, but residents do not have good images about this company. Good images to people is the way to attract the investors to give the money for marketing.
Now, POSCO is trying to go the top of the steel industry, therefore POSCO needs more competitive strategies to fit world market.
6th entry, Lee, yong jae