Hyundai Group to Build Steel Mill
Vince Courtenay Ward's AutoWorld, Jun 1, 2005 12:00 PM

Hyundai Automotive Group is expected to formally announce plans for constructing a new integrated steel mill complex that will handle the entire steel-making cycle, from smelting ore to producing various industrial steels.

The proposed project is estimated to cost about 6 trillion won ($6 billion) for the first stage. The mill eventually will be capable of producing 3 million tons (2.7 million t) of steel annually, the conglomerate says.

Hyundai Group, which owns Hyundai Motor Co. Ltd. and Kia Motors Corp., says in a statement: “We have drawn up a comprehensive road map to enter the blast furnace business. We plan to officially announce the investment size and project schedule.”

A Hyundai spokesman says one location under consideration is in Hanjin, Chungcheong province, where the INI Steel mill is located. Other locations also are under consideration.

INI Steel, in a consortium with its affiliate Hyundai Hysco, part of the Hyundai Group, signed a final contract July 31 for the takeover of Hanbo Iron & Steel Co., whose downfall partly contributed to South Korea's 1997-1998 foreign exchange crisis.

Hanbo filed for bankruptcy in 1997 but was kept afloat by loans from government-owned banks. It ceased its primary steel-making operations in 1998 amid charges by the U.S. steel industry and the U.S. Congress of the South Korean government's unfair subsidies to the company.

Hanbo was purchased last year by the Hyundai Automotive Group on the condition INI sell part of its existing steel-bar production facilities. Under the conditional approval, INI Steel was to sell its 300,000-ton (272,154t) steel-rolling mill within a year, according to a report in the Korea Times.