By Kang Seung-woo
POHANG — Korean steel giant POSCO Tuesday broke ground on a new 1.3 trillion won (about $1.2 billion) plant in the southeastern city of Pohang.
The facility will be the company’s third plant to employ its own FINEX technology, touted as more environmentally friendly and cost effective than conventional steelmaking methods.
The newest plant, which will be completed by July 2013, will have an annual production capacity of 2 million tons, which would elevate POSCO’s FINEX output capacity to 4.1 million tons or 25 percent of its total crude steel capacity that year.
“FINEX technology is an innovation that opens the next generation for iron-making, enabling steelmakers to use low-grade coal fines that account for about 80 percent of the world’s iron ore deposits. The eco-friendly process will also dramatically reduce pollution from the production process,” POSCO Chairman Chung Joon-yang said at the dedication ceremony attended by company executives and government officials including Prime Minister Kim Hwang-sik.
“The third FINEX plant will cement POSCO’s status in the global steel market and contribute to the nation’s economic growth,” Prime Minister Kim said.
The FINEX method enables POSCO, currently the world’s third-largest steel maker, to use cheaper raw materials like iron ore fines and non-cocking coal to produce steel products that are comparable in quality to those produced from the conventional blast-furnace process.
This allows the company to save costs in both facility investment and operation by 15 percent each. Company officials also describe FINEX as a “green” technology that is designed to meet the strengthening environmental regulations here and in other countries. Compared to blast-furnace technology, the FINEX process produces about 30 percent less dust and also dramatically reduces sulfur and nitrogen oxide emissions.
The new plant’s annual production capacity of 2 million tons will be the largest among factories that produce molten iron ore without using a blast furnace, company officials said
“Due to soaring raw material prices and rising interest in eco-friendly technology, leading global steel manufacturers have arduously worked on methods similar to the FINEX process, but they have failed to commercialize them,” a POSCO official said.
POSCO began laboratory testing of the FINEX technology in 1992 and completed a 600,000 ton demo plant in May 2003. In May 2007, it successfully erected a commercialized FINEX plant with the capacity of 1.5 million tons.
POSCO said that the plant will contribute to the local communities, as around1.25 million jobs are estimated to be created during the 25-month construction period, revitalizing the local economy.
Along with the FINEX plant, POSCO plans to build its fourth wire-rod plant and a new stainless steel plant, both of which will break ground in December this year. The company said that the No. 3 FINEX plant will meet the additional molten iron demand spurred by the two factories.