UPDATE 1-POSCO to invest $200 mln in S.African manganese mine
Fri Apr 18, 2008 1:57am EDT
reuters.com
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SEOUL, April 18 (Reuters) - South Korean steel maker POSCO (005490.KS: Quote, Profile, Research) said on Friday it would invest $200 million to take 13 percent of a South African manganese mine, its latest move to add mining assets and cut pressure from soaring raw material prices.
POSCO said the purchase will be made by joining international consortium Pallinghurst, which owns 49.9 percent of the Kalahari mine in Northern Cape province and is controlled by privately held coal firm AMCI (American Metals & Coal International) and South African financial firm Investec (INVP.L: Quote, Profile, Research).
POSCO, the world's fourth-largest steel maker by output and No.2 by market value, said the deal will help it secure 25 percent of its annual requirement of manganese MNG-LON, used to harden stainless steel.
The project is expected to start production in 2010 and POSCO will get 130,000 tonnes of manganese supply annually from the project.
POSCO said it would also actively pursue investing in global iron ore and coal assets through an alliance with the consortium.
The decision comes after POSCO agreed to pay Brazilian miner Vale (VALE5.SA: Quote, Profile, Research) 65 percent more for its iron ore from April and to treble what it pays an Australian supplier for coking coal.
Rising raw material costs are pushing up inflationary pressure across Asia, adding to soaring food and energy bills, and hitting steel mills hard as they do not own large mining assets, unlike western rivals such as ArcelorMittal (ISPA.AS: Quote, Profile, Research) and U.S. Steel Corp (X.N: Quote, Profile, Research).
Pallinghurst, run by former BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) chief executive Brian Gilberston and AMCI president Hans Mende, plans to invest $1.5 billion in global mining projects by 2012.
Shares in POSCO, the second-largest firm in South Korea, were down 0.1 percent to 449,500 won by 0555 GMT. (Reporting by Miyoung Kim; Editing by Keiron Henderson) |
