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| Anti-coup protesters holding pictures of those who died during a protest against the military offer prayers for them in Yangon, Myanmar, Monday. AP-Yonhap |
By Yi Whan-woo
POSCO denied allegations, Tuesday, that a highly profitable offshore gas field it operates in Myanmar is tied to the country's military junta and is being used to help fund the bloody crackdown on pro-democracy protesters.
The Korean conglomerate said in a statement that the gas field, along with three among five businesses it runs in Myanmar, had been operating for 20 years before the military led by General Min Aung Hlaing staged a coup in February and overthrew the democratically-elected government.
The three are a hotel, a rice-processing complex and a trading company, all run by the steelmaker's trading arm, POSCO International. POSCO acquired the businesses in 2010 to expand its portfolio beyond steel manufacturing.
The fifth business the steelmaker operates there is Myanmar POSCO Coated and Color (MPCC), a steel joint venture run between its subsidiary POSCO C&C and Myanmar Economic Holdings Limited (MEHL), one of the country's military-controlled conglomerates.
In MPCC's case, POSCO said it will not pay dividends to MEHL until the Myanmar crisis is settled. The steelmaker said it could even reconsider its partnership with MEHL depending on how the political situation develops.
"MPCC is the only business that is admittedly tied to the Myanmar military," the firm noted.
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| An offshore gas field project off the coast of Shwe, 500 kilometers away from Myanmarese capital of Naypyidaw, is POSCO's most-profitable business in Myanmar. Korea Times file |
The gas project off the coast of Shwe, located 500 kilometers away from Myanmarese capital of Naypyidaw, has been disputed as it includes Myanmar Oil and Gas Enterprise (MOGE), a state-run company in a consortium of six international companies led by POSCO.
The Shwe gas field project posted sales of $623 million in 2020, accounting for 86 percent of POSCO International's total sales in Myanmar.
The gas field generated $276 million in operating profit last year, accounting for 64 percent of the company's total operating profit in the country.
MOGE has a 15 percent stake and this prompted pro-democracy supporters of Myanmar to claim the business is being used to finance the military regime.
"We don't buy that argument, given the fact that our relationship with MOGE dates back far before the coup," POSCO said. "It is illogical to say we are supporting the military junta because of the abrupt change in government."
The world's fifth-largest steelmaker said it has been monitoring the moves of other multinational companies that are reconsidering their businesses in Myanmar or have already pulled out.
Nevertheless, POSCO drew a line on the possible suspension or withdrawal from the gas project.
The firm referred to a binding, multi-party contract, saying, "Any unilateral decision we take can damage the hard-earned partnership."
It said a possible suspension demanded by the Committee Representing Pyidaungsu Hluttaw (CRPH) could provoke the military's leaders.
Formed by elected members of parliament, CRPH styles itself as the sole legitimate government of the country and rejects the ruling junta as lacking legal standing.
POSCO said suspending the gas project would ultimately hurt the Myanmar economy and civilians, noting it is used to generate electricity.
It claimed that Chinese or other foreign businesses may replace POSCO if it pulls out, saying, "It will only benefit the junta while inflicting damage to Korea."
Meanwhile, POSCO said it has begun bringing back Korean employees and their family members from Myanmar. More than 50 workers and their families have been living there.
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