POSCO Considering Joint Development of Minimill in Russia
Basic Element is one of Russia's leading diversified business groups, En+ Group is one of Russia's leading mining, metals and energy groups and POSCO is a Korea-based steelmaker.
The MoU was signed by Oleg Deripaska, chairman of the Supervisory Board of Basic Element and CEO of En+ Group and Chung Joon-yang, CEO and chairman of POSCO.
As the first step of cooperation, En+ Group and POSCO will consider a joint development of a steel mini-mill project in the Irkutsk region. The steel mini-mill will focus on the production of long steel products, and will have an estimated capacity of up to 260,000 tonnes per year. It is expected to be the first producer of such products in the region, and will allow the companies to benefit from the growing demand for long steel products, which are mainly used for the construction industry in Eastern Siberia.
En+ Group and POSCO also agreed to cooperate in relation to the Lenskaya Power Plant project in the Irkutsk region and joint exploration and drilling of the Kupsky gas deposit, which aims to supply gas to the Lenskaya Power Plant. The installed capacity of the Lenskaya Power Plant is expected to be 1.26GW. Among the prospective consumers of its electricity are the new mining and metals projects in Eastern Siberia, the Eastern Siberia-Pacific Ocean oil pipeline, as well as the Baikal-Amur Mainline Railway.
A Research and Design Centre for the implementation of POSCO's "green building solutions" will be established in Basic Element construction factories to find a business opportunity for green building projects and sustainable urban development in Russia.
Basic Element also established cooperation base with POSCO in equipment to the airports owned and operated by Basel Aero (a part of Basic Element Group).
Oleg Deripaska commented: "We are pleased to strengthen our ties with POSCO, as we see South Korea as a key strategic partner in developing mining, metals and energy projects in the East of Russia. We see POSCO a long-standing partner and hope that this cooperation will bring mutual benefit to the companies and is yet another big step in Russia-Korea cooperation."
Chung Joon-yang of POSCO commented: "Close cooperation with Basic Element and En+ will not only maximize both companies' merits, but also provide good opportunities to POSCO in advancing to Eastern Siberia region, as business fields between two companies are highly correlated."
Basic Element is one of the Russia's largest and most dynamic diversified industrial groups. Basic Element's companies are controlled by or are within the scope of business interests of Oleg Deripaska, one of the major Russian businessmen. Basic Element through its affiliates owns significant stakes in and operates a number of companies in many segments: Energy, Manufacturing, Financial Services, Construction, Aviation, Agriculture and others. Over 250,000 people work at more than 100 of Group's companies in Russia, the CIS, Africa, Australia, Asia, Europe and Latin America. Many of them play key roles in their respective market segments in Russia and internationally, including En+ Group, GAZ Group, Glavstroy, Basel Aero and others.
En+ Group is a leading Russian diversified mining, metals and energy group. En+ holds a controlling stake in the world's largest aluminum producer UC RUSAL, owns Russia's largest independent power producer EuroSibEnergo and one of the leading suppliers of ferromolybdenum to the global market SMR, significant coal assets and logistics business. En+ Group's companies project pipeline includes R&D on small-scale nuclear power, projects in hydropower, coal, iron ore, gold and aluminum downstream. The core base of En+'s businesses is located in Eastern Siberia -- close to fast growing Asian markets. En+ consolidated revenue in 2012 exceeded US$13.6 billion.
POSCO is a global steel-making company headquartered in the southeastern port city of Pohang, South Korea. It had an output of 39.9 million tonnes of crude steel in 2012, making it the world's fifth largest steelmaker on the basis of output. In 2010, POSCO was named as the 146th world's largest corporation by the Fortune global 500. Also, POSCO received 'World's Most Competitive Steelmaker' award from World Steel Dynamics. Since 2010, it has received the award for 4 consecutive years, concreting its position as the global leader of steel industry. Aside from the steel-making, POSCO currently operates various business fields such as construction, energy, trading,etc.