South Korean steelmaker POSCO (PKX: 103.33 -2.67 -2.52%), through its Australian unit POSCO Australia Pty. Ltd.(POSA), acquired 70% share in the Australia`s Sutton Forest Mine. The share acquisition not only raises POSCO’s self-sufficiency ratio of coal to 36% from 30% but also augments POSA’s resource-exploiting expertise.The Sutton mine belonged to Anglo American, a global mining company, and currently has coal reserves of approximately 115 million tons. Per the terms of the transaction, the Sutton mine will supply roughly 1.3 million tons of coal annually to POSCO when fully operational in 2016.
The share acquisition was part of POSCO’s strategy to broaden its global footprint by investing in production bases outside Korea, specially China, India, Southeast Asia and Mexico. The company is all geared up to increase its self-sufficiency ratio of coal to 50%.
Apart from investments in coal mines, POSCO has also purchased shares of iron ore mines including Australia`s POSMAC, Jack Hills, Jupiter, Roy Hill, and Brazil`s Namisa. New Caledonia`s nickel mine, Mt. Hope`s molybdenum mine in USA, South Africa`s Kalahari manganese mines and others comprise POSCO’s overseas investments. These investments were done with the purpose to secure materials lacking in Korea.
POSCO is the largest fully integrated steel producer in Korea, and one of the premier steel producers in the world. At the end of first quarter 2010, the company’s total crude steel production leaped from 6.45 million tons to 8.64 million tons, reflecting an increase of 33.9% year over year. For 2010, management expects consolidated steel production to reach 36,100 billion.
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