Posco Holdings announced in a regulatory filing that it will invest USD582 million for its stake, with the transaction being carried out through the newly established Posco Louisiana. The partnership represents a tangible step following the memorandum of understanding signed between the two groups in April, which covered collaboration in steel and secondary battery sectors.
This rare cooperation between two South Korean producers, known for their competitive positions, comes amid high U.S. tariffs on steel and rising demand for low-carbon steel. Establishing local production capacity in the U.S. will allow the companies to mitigate tariff risks while supplying more sustainable products to the North American market.
According to Hyundai Steel, the plant is scheduled to begin commercial production in the first quarter of 2029. The project’s USD5.8 billion financing will be split evenly between equity (USD2.9 billion) and debt (USD2.9 billion). Hyundai Steel will invest USD1.46 billion for a 50% stake, Hyundai Motor and Kia will each contribute USD440 million for a 15% stake, and Posco will hold a 20% share in the partnership.
With an annual capacity of 2.7 million metric tons, the facility will focus on producing automotive steel sheets for the U.S. and Mexican markets. The complex will include direct reduced iron (DRI) production, electric arc furnaces (EAF), and hot- and cold-rolled steel lines.
Posco Holdings officials emphasized that this investment aims to establish a local production base for EAF technology in the U.S. and ensure a stable supply of low-carbon steel to North America.
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