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Posco Secures 100% Ownership of South Africa-Based Poschrome
07/14/2011 - Posco signs a MoU with JV partner Samancor Chrome to secure 100% ownership of South African ferrochrome manufacturer Poschrome.
Posco Chairman Joon-yang Chung recently visited five countries in Africa including Kenya, Tanzania and South Africa to discuss ways to enter the East African market and secure major strategic resources.
During the trip Posco entered into an MOU with South Africa’s Samancor Chrome to acquire shares of Poschrome, a 50-50 ferrochrome manufacturing joint venture in South Africa established in 1996 by Posco and Samancor Chrome. Under the new MOU, Posco will acquire the remaining 50% shares held by Samancor Chrome, thus securing 100% shares in Poschrome. Posco will not only utilize Poschrome as a stainless material source, but also as a bridgehead to develop additional resources in the Africa region.
During the trip Posco entered into an MOU with South Africa’s Samancor Chrome to acquire shares of Poschrome, a 50-50 ferrochrome manufacturing joint venture in South Africa established in 1996 by Posco and Samancor Chrome. Under the new MOU, Posco will acquire the remaining 50% shares held by Samancor Chrome, thus securing 100% shares in Poschrome. Posco will not only utilize Poschrome as a stainless material source, but also as a bridgehead to develop additional resources in the Africa region.
Highly corrosion proof and heat resistant, ferrochrome is an essential ferroalloy for the production of stainless steel. Posco imported approximately 480,000 tonnes of ferrochrome last year to produce 1.83 million tonnes of stainless crude steel at Pohang Steelworks. Recently, since demand in China has sharply increased, it has become increasingly important to secure a stable source of ferrochrome.
At the MOU ceremony, Chairman Chung said, “I would like to thank Samancor Chrome for allowing us to secure 100% of Poschrome shares. Poschrome has been stably providing good quality ferrochrome with integrated stainless facilities from the start. We will further develop Poschrome and speed up Posco’s projects to secure resources in Africa.”
South Africa holds 70% of the world’s chrome reserves, and provides 40% of the world’s ferrochrome needs. With an annual production scale of 1.3 million tonnes, Samancor Chrome is the world’s second ferrochrome manufacturer behind Xstrata of South Africa.
In addition to Poschrome, Posco is also planning to establish a joint venture with India’s IMFA in September to further increase the self-supply of ferrochrome.
At the MOU ceremony, Chairman Chung said, “I would like to thank Samancor Chrome for allowing us to secure 100% of Poschrome shares. Poschrome has been stably providing good quality ferrochrome with integrated stainless facilities from the start. We will further develop Poschrome and speed up Posco’s projects to secure resources in Africa.”
South Africa holds 70% of the world’s chrome reserves, and provides 40% of the world’s ferrochrome needs. With an annual production scale of 1.3 million tonnes, Samancor Chrome is the world’s second ferrochrome manufacturer behind Xstrata of South Africa.
In addition to Poschrome, Posco is also planning to establish a joint venture with India’s IMFA in September to further increase the self-supply of ferrochrome.
In Kenya, discussions centered on the steel business promotion plan that the Kenyan government is currently carrying out. Daewoo International and Posco E&C expressed interest in assisting with the Mombasa Port 600MW coal development project and the Nairobi Toll Road project that are currently under development.
In Tanzania, which has great potential associated with vast mineral resources, discussions took place regarding development of resources including iron ores, coal, nickel and manganese.
