Posco steals a march with technological breakthrough

South Korea???s Posco is preparing to expand overseas and overtake Nippon Steel of Japan as the world???s third-biggest steelmaker by using its groundbreaking Finex technology. This revolutionary steel- making process is based on the next-generation Finex technology which is both cleaner and cheaper than traditional blast furnaces.

Lee Dong-hee, Posco chief financial officer said: ???Some other countries will only allow us to build plants on condition that we use the Finex technology. The Finex technology is the main reason why many Chinese steelmakers want to do joint projects with us ??” Finex is classified as a new technology.??

Allowing the production of molten iron directly from iron ore and non-coking coal, the process cuts out the processing needed for blast furnaces. Finex facilities are also about 20% cheaper to build than traditional blast furnaces and they produce steel for about 15% less.

At its main base in Po-hang, Posco???s Finex test plant is running on a commercial basis, producing 200,000 tonnes more than its 600,000 annual capacity and the main plant is capable 1.25m tonnes a year. Posco is now looking to install Finex at plants in Vietnam, India and perhaps even China. Lee said: ???The Finex technology is good to take abroad because it is cheaper to build Finex plants and the production cost is also cheaper as we can use low-grade iron ore and coal to produce steel with the technology.?? Its relative environmental friendliness is also an attraction for international customers, he said. Finex technology is claimed to reduce air pollution by up to 99%.

Posco intends to take Finex to India, where construction of the $12bn integrated steel mill in Orissa is finally due to start early next year and will be operational by 2011 with an eventual annual production capacity of 12m tonnes. Posco is also conducting a feasibility study on building an integrated steel mill in Vietnam, upon the Vietnamese government???s request.

Posco is already building a $500m cold-rolled steel plant in Vung Tau with an annual capacity of 1.2m tonnes. A joint venture with Vinashin, Vietnam???s largest state-run shipbuilder, the $4.5bn project is scheduled to be completed by 2012.

The Finex technology produces only 5% of Posco???s steel, but the company is working on building larger capacity facilities.