POSCO will construct an integrated steel mill capable of producing 1.6 million tons per year in Iran, applying its innovative FINEX and CEM technologies. At the Iran-Korea Business Forum held in Teheran, Iran on February 29, POSCO signed a memorandum of agreement (MOA) with Iranian steelmaker PKP (Pars Kohan Diar Parsian Steel) to construct an integrated steel mill.
Under the agreement, POSCO will shoulder 8 percent of the total construction cost of the steel mill—approximately $1.6 billion—and transfer its POSCO innovative steelmaking technology (POIST) to its Iranian partner. PKP will pay for the remaining 92 percent.
POIST is a combination of its own innovative FINEX and compact endless cast and rolling mill (CEM) technologies. FINEX is an environmentally-friendly technology for producing molten metal using powdered iron ore and bituminous coal directly as fuel without needing to undergo pre-treatment. CEM is a technology that reduces energy consumption by integrating the molten metal casting and steel rolling processes into one.
At the MOA signing ceremony, with over 100 participants, including the Minister of Trade, Industry and Energy Joo Hyunghwan, Iranian Minister of Energy Hamid Chitchian and POSCO Group officials, POSCO and PKP agreed to carry out the project in two phases. The first will involve the construction of the integrated steel mill; the second will consist of the establishment of an additional cold rolling and plating line with an annual capacity of 600,000 tons, to help accelerate production of high-value products.
Meanwhile, POSCO Energy and POSCO E&C also signed a memorandum of understanding (MOU) with the Korea Electric Power Corporation (KEPCO) and PKP to build an off-gas power plant and undertake a desalination project. POSCO Energy and KEPCO will be responsible for the operations and maintenance of the power plant and desalination facility, while POSCO E&C will oversee construction of the plant and facility. The power plant and desalination facility will later provide a stable supply of power and water for steel mills and the Chabahar Free TradeㅡIndustrial Zone (CFZ).
The construction site for the integrated steel mill is located in CFZ near the coast of Oman, south of Iran. CFZ is conveniently located due its abundance of raw materials and tax privileges. Before breaking ground in March 2017, POSCO will finalize the specifications for the facilities, and perform technical reviews and due diligence.
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