Korean steelmaking giant to build plant in Kazakhstan

Thursday, October 21, 2010 - South Korean steel giant Posco plans to build a factory in Kazakhstan to produce materials used in steel manufacturing.

Posco and Kazakhstan’s Zaman Group have inked a deal to build a polysilicon aluminum plant.

The plant will have an initial annual output of 45,000 tons and expand to 400,000 tons a year after 2012 when its commercial production begins.

Under a memorandum of agreement, Zaman and the Korean steelmaker’s materials unit Samjung P&A will set up a joint venture （JV） in the city of Ekibastuz in northeastern Kazakhstan, Posco announced on Thursday.

The Kazakh firm will hold a 40 percent stake in the JV, while the Korean steel material and packaging company will hold the remainder.

Posco, the world’s third-largest steelmaker, did not disclose the value of the deal.

The plant will enable Posco to reduce its heavy dependence on China for its polysilicon-aluminum supplies.

"The plant will enable Posco to secure a stable, economical supply ferrosilicon aluminum," the Platts news agency Thursday cited the steelmaker as saying in a statement.

The Korean steel company also said it aims to export the materials it produces in the Central Asian republic to Europe, China and Korea through its Daewoo subsidiary.

In May, Posco bought a 68.2 percent stake in Korean steel and chemicals trader and energy developer Daewoo International for $2.8 billion to expand its sales network and secure raw materials.