POSCO to almost double nickel-smelting capacity

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SEOUL, Aug. 30 (Yonhap) -- POSCO, South Korea's leading steelmaker, said Tuesday that it will almost double its nickel-smelting capacity in order to secure a stable supply of the raw material and reduce costs.
POSCO said its venture with Societe Miniere du Sud Pacifique SA (SMSP) of New Caledonia, established in 2006, will expand its production capacity to 54,000 tons of nickel by 2014 from the current 30,000 tons. Nickel is used to make stainless steel.
The venture in Gwangyang, 423 kilometers south of Seoul, will spend 480 billion won (US$448 million) on the facility expansion.
The venture, which is 49 percent owned by POSCO and 51 percent owned by SMSP, has secured a 30-year supply of nickel ore from the French-controlled island.
POSCO said once the smelting factory is expanded, it will help the company control the costs of raw materials as nickel roughly accounts for up to 60 percent of the cost of producing stainless steel.
Demand for stainless steel, mostly used in cars and home appliances, is rising in line with the global economic recovery.
POSCO, the world's third-largest steelmaker, produces 3 million tons of stainless steel annually and is constructing plants overseas, such as those in China.
Over the past few years, POSCO has taken over Asia Stainless Corp. in Vietnam and Taihan ST Corp. in South Korea.
Also, POSCO is seeking to buy Thainox Stainless PCL. of Thailand, Southeast Asia's largest stainless steel producer, as part of efforts to boost its presence in the region.
Shares of POSCO closed at 401,000 won on the Seoul bourse, up 1.65 percent from the previous session's close.