POSCO Group signs MOU with global raw materials company BHP for collaboration on HyREX hydrogen reduction steelmaking technology

Chairman Chang presents future vision for the global supply chain at APEC CEO Summit, based on Korea-Australia economic cooperation cases

On October 30, Australian Prime Minister Anthony Albanese visited POSCO’s Pohang Works, a company that represents economic cooperation between Korea and Australia.

This marks the first visit by an Australian Prime Minister in 22 years, since former Prime Minister John Howard in 2003, and serves as an opportunity for the two nations to further strengthen their future-oriented partnership across various industries, including resources, materials, and future energy.

Prime Minister Albanese toured the raw material pier at Pohang Works, where he observed the actual use of Australian iron ore and coking coal, and received a briefing on HyREX, Korea’s proprietary hydrogen reduction steelmaking technology.

POSCO Group began purchasing Australian iron ore in 1971 and has since used over 1.5 billion tons of Australian iron ore and coking coal — a symbolic example of Korea-Australia cooperation in the resources and steel industries.

Prime Minister Albanese stated, “Australia is one of the world’s leading resource-rich nations, a land of infinite opportunity where industries can grow through investment in critical minerals. Australia’s abundant resources will be a driving force for the global economy, and we will continue to expand cooperation with Korea.”

Chairman In-hwa Chang of POSCO Group said during his meeting with the Prime Minister, “Australia is a strategic partner with whom we are pioneering future growth industries, extending beyond steel to secondary battery materials and energy. I expect this visit to serve as a catalyst for strengthening trust between our two countries.”

Since its investment in the Roy Hill iron ore mine in 2010, POSCO Group has been promoting an HBI (Hot Briquetted Iron) production project in Australia as a low-carbon steel raw material initiative, and in 2022, it acquired Senex Energy to expand its natural gas business.

Prior to the meeting with the Prime Minister, POSCO Group signed a memorandum of understanding (MOU) with BHP, Australia’s leading global raw materials company, for R&D cooperation on the HyREX carbon reduction steelmaking process. Under the agreement, BHP will provide the iron ore feedstock and technical expertise required for the trial operation of the HyREX demonstration plant. POSCO Group plans to develop this cooperation into a successful example of climate change response jointly undertaken by a global steelmaker and a raw materials supplier.

Earlier in the day, Chairman Chang delivered a keynote speech at the APEC CEO Summit held at the Gyeongju Arts Center, under the theme “Connecting the Future: POSCO’s Supply Chain Partnerships for Shared Prosperity.”

He emphasized the importance of multilateral cooperation and solidarity in building sustainable and resilient global supply chains, which have emerged as a core agenda for the global economy. He also shared examples of strategic economic cooperation between POSCO Group and Australia over the past half-century, including strengthening raw material supply chains, co-developing low-carbon products, and transitioning to future energy.

Following the keynote, a panel discussion was held with Garry Korte, CEO of Hancock, and Omoto Masayuki, CEO of Marubeni, to explore solutions for global supply chain challenges from multiple perspectives.

On October 29, POSCO Group also hosted “POSCO Night,” inviting key business partners. Attendees included Simon Trott, CEO of Rio Tinto Group, and Zhu Wei, President of CATL ESS, who engaged in extensive exchanges with POSCO Group’s management to explore business cooperation opportunities.

▲ Australian Prime Minister Anthony Albanese visited the Pohang works on the 30th. Prime Minister Albanese and POSCO Group Chairman In-hwa chang agreed to continue expanding economic cooperation between Korea and Australia.

Completion of the test facility with an annual capacity of 300,000 tons slated for 2027

Expansion of dedicated organization for carbon-neutral strategy and electric furnace advancement… Commencing full-scale implementation of the 2050 carbon neutrality roadmap

POSCO has opened a Hydrogen Reduction Ironmaking Development Center at Pohang Works and restructured its carbon-neutral organization.

The Development Center, which opened on January 26, plans to play a pivotal role in constructing test facilities for HyREX (Hydrogen Reduction Ironmaking), a proprietary process developed by POSCO, encompassing all stages from technology research to facility construction and test operations.

The Development Center houses the HyREX Project Team, the Investment Planning and Engineering Office, which is responsible for managing investment projects, the Low Carbon Iron and Steel Making R&D Center, and POSCO E&C for design responsibilities. This integrated approach encompasses everything from technological research and equipment setup to test operations.

Hydrogen Reduction Ironmaking technology, recently recognized for its strategic importance in national security and its impactful influence on the national economy, has been designated as a national strategic technology. POSCO’s Hydrogen Reduction Ironmaking Development Center plans to complete a HyREX test facility with an annual capacity of 300,000 tons by 2027 and validate the commercial viability of HyREX technology.

Si-woo Lee, who attended the center’s inauguration, said, “Let’s strive to become the first mover in the new Iron Age by developing Hydrogen Reduction Ironmaking technology, replacing carbon with hydrogen. I hope you will take on a new challenge as the first treasure of the new carbon-neutral economy^*, successfully implementing HyREX technology based on our experience in commercializing FINEX fluidized bed technology and developing SNNC electric melting furnace technology.”

*Economic National Treasure: A tangible or intangible economic and industrial heritage that has made a decisive contribution to the development of the Korean economy. Pohang Steelworks’ Blast Furnace No.1 was designated Economic National Treasure No. 1 in 2011 for supplying materials to industries like shipbuilding, automotive, and home appliances, significantly enhancing national industrial competitiveness.

In addition, POSCO has upgraded its Carbon Neutral Strategy Sector to a departmental level and appointed Hee Kim, the first female engineering executive, as Head of Carbon Neutral Strategy Department.

Furthermore, to complete and operate the electric furnace planned for Gwangyang Works, POSCO is actively pursuing the implementation of its carbon-neutral roadmap through the expansion and restructuring of its Electric Arc and Smelting Furnace Project Team).

▲The Hydrogen Reduction Ironmaking Development Center was inaugurated at Pohang Works on January 26.

▲On January 26, at the inauguration of POSCO’s Hydrogen Reduction Ironmaking Development Center, attendees pose for a commemorative photo. (Front row from left) Woo-young Jeong, Head of Investment Planning and Engineering Office; Seoung-jun Kim, Head of Steel Production and Technology Strategy Office); Chul-moo Lee, Head of Plant Business at POSCO E&C; Si-youl Choun, Head of Pohang Works; Si-woo Lee, President; Jean-su Lee, Head of Steel Production & Technology Division); Ki-soo Kim, Head of Technical Research Laboratories); Hee Kim, Head of Carbon Neutral Strategy Department); and Jin-chan Bae, Head of HyREX Project Team.

▲The Hydrogen Reduction Ironmaking Development Center.

Let’s solve the curiosity about Community With POSCO, the last of the Five POSCO Corporate Citizenship Brands in this episode!

From the beginning of its foundation, POSCO considered growing with the local community as corporate social responsibility, solving various social problems with residents mainly in Pohang and Gwangyang where POSCO Group’s business sites are located, and Seoul and Incheon, and presenting a model in which companies and society develop together.

POSCO established Korea’s first integrated steelworks in Pohang on April 1, 1968, establishing a relationship with Pohang City. In addition, POSCO has been together with Gwangyang City since November 1981 when Gwangyang was confirmed as the site of the second steelworks, and the employees of both steelworks and partner companies have also been steadily carrying out sharing activities as members of the local community.

Pohang Works, which has been practicing Community With POSCO, is carrying out various win-win cooperative activities in the community. The employees are expressing their hearts through various activities, including sisterhood village sharing activities in which villages and departments set up sisterhood relationships and practice sharing, operation of the soup kitchen, talent donation groups that utilize the talents of employees, and welfare projects in cooperation with local social welfare organizations.

Let’s take a closer look at each of the representative activities of Pohang Works that practice Community With POSCO.

Sharing activities in sisterhood villages(region)
Pohang Works has been affiliated with 122 villages and 6 organizations and has been maintaining ties with 194 villages, including 18 group companies and 48 partner companies.

This year, in particular, many neighbors were suffering from difficulties in the region due to COVID-19, and POSCO first provided tablet PCs and other learning kits to local children’s centers to minimize the educational deviations caused by the increase in online classes so that students can use them in actual classes.

▲ An online learning kit application ceremony for local children is held at Pohang City Hall (left) and classes using learning kits.

In addition, the soup kitchen, which has been operated as part of community contributions since 2004, has been continuing to provide steady support by delivering meal kits so that people can eat at home in consideration of the difficulty of visiting meals due to COVID-19.

Executive and Employee Talent volunteer activities
POSCO executives and employees’ representative sharing activities are the ‘Talent Volunteer Group’, which combines their talents with volunteer work. In Pohang, there are about 40 talent volunteer groups including the Clean Ocean Volunteer Group, bicycle repair, and foot massage, and about 2,000 volunteers are active. Executives and employees are sharing their talents in various fields and helping their neighbors.

▲ Underwater purifying activities at Yeongilman Port (left) and replacing the wallpaper and the floor mat for senior citizens living alone.

This year, the Pohang Talent Volunteer Group has made special achievements. In the meantime, there have been many difficulties as each volunteer group had to operate a meeting place and storage for volunteer activities individually but the Nanum School, which will serve as a hub center for the talent volunteer group, is about to be completed in September this year.

The reason why Pohang Nanum School is even more special is that it will be built with a modular construction method that has all of the stability, convenience, and economic feasibility. Thanks to this, many volunteers have high expectations as it is expected to be used sooner than the building itself.

▲ A bird’s eye view of Pohang Nanum School, which maximizes aesthetics and efficiency through the application of the modular construction method,

Community social contribution project
Pohang Works is also taking the lead in social contribution projects to support the disadvantaged including those of multicultural families, disabled people, future generations, and senior citizens.

In particular, the 1% Sharing Foundation with the warm hands of its executives and employees is engaged in various local win-win activities and is collaborating with various local cooperative organizations to practice more professional and efficient support.

The most recent side dishes sharing for the underprivileged was even more meaningful as it was an event in which seven employees of the 1% Sharing Project Selection Committee in Pohang took advantage of personal and shift holidays to serve as daily chefs for the underprivileged in the region.

▲ Sharing side dishes for the underprivileged in the region (left) and sharing desks for children from North Korean refugee families.

Global Good Citizenship Week
During POSCO Global Good Citizenship Week, which was held from June 1 to 8 this year, 2,348 executives and employees also participated in Pohang to support the disadvantaged people exhausted from COVID-19, and took the lead in improving the residential environment, cultivating green spaces, and environment cleaning activities.

▲ Making a table of love during Global Good Citizenship Week (left) and taking pictures of the senior citizens living alone.

Marking its 12th anniversary this year, Global Good Citizenship Week was a great opportunity to deliver a helping hand to neighbors who have become more difficult due to COVID-19, carry out eco-friendly activities to practice carbon neutrality in terms of ESG management, and establish roles and ownership as a member of corporate citizenship.

Gwangyang Works, which is practicing Community With POSCO, is carrying out various win-win cooperative activities. The executives and employees practice sharing in a variety of ways, including sister village sharing activities in which villages and departments form sisterhood relationships and practice sharing, talent volunteer group activities of the executives and employees which exceeded more than 40 in 2021, Nanum school that spreads volunteer culture, welfare projects in cooperation with local social welfare organizations, and Gwangyang University Gugak Festival which expands opportunities to enjoy local cultural performances.

Let’s take a closer look at each of the representative activities of Gwangyang Works that practice Community With POSCO.

Sisterhood Villages (region) sharing activities

▲ Helping the harvest of plums, a specialty of Gwangyang (left), and support activities for remodeling the village welfare center in Myodo-dong, Yeosu.

Sisterhood Villages volunteer activity is the oldest and most historic social contribution activity among sharing activities of POSCO. Each department of the steelworks communicates with sisterhood villages in nearby areas to help workers in rural areas or provide various support and help at the request of the village.

Gwangyang Works has been maintaining a deep relationship with 82 villages and a total of 127 villages if including the partner companies and affiliates, and POSCO’s sharing culture is spreading over a wide range of areas, including Gwangyang as well as nearby Yeosu and Hadong.

Executives and employees talent donation
A representative sharing activity of POSCO executives and employees is talent volunteer group, which combines the talents of employees with volunteer work. The Gwangyang Works talent volunteer group, which started with six in 2014, has steadily increased, and now more than 40 talent volunteer groups and 2,000 employees are actively spreading the sharing culture in the local community.

The five newly established talent volunteer groups held a launching ceremony at Nanum School on April 9 to announce a strong start. The newly created talent volunteer groups present sharing and joy to the caring group in the region through nail art, love-sharing rice puffs, happy laundry, nesting place arrangement, and traditional play culture, and plans to establish three more volunteer groups in the second half of this year.

▲ The leaders of the 2021 new Talent Volunteer Groups held a launching ceremony at Nanum School.

Nanum School is a facility opened in 2019 and is a kind of educational facility opened in May last year by Gwangyang Works to improve the talent capabilities of its executives and employees and expand opportunities for executives, employees, and citizens to participate in volunteer work.

▲ The panoramic view of Nanum School at Gwangyang Works (left) and the beauty volunteer group laboratory inside the Nanum School.

The Nanum School is equipped with a lecture room for learning and lectures, a laboratory for some talent volunteer groups, and an auditorium that can be used jointly and is the home for the volunteer groups with more than 13 talent volunteer groups. About 300 people take lectures on talent volunteer groups at Nanum School every month, and not only executives and employees but also many citizens use it.

From August 1, 2021, Gwangyang Works will use its in-house blog system to operate ‘Talk Talk’, an online communication space where employees who have completed their volunteer work can share the joy and reward of volunteering. In the future, more than 230 volunteer groups, including department and group volunteer activities, talent volunteer groups, and general volunteer groups, plan to create an encouraging community culture in which they share and encourage each other’s activities.

Community social contribution project
Gwangyang Works is carrying out social contribution projects to help the caring group with various social welfare organizations in the region. The beneficiaries are the future generation, senior citizens, multicultural families, and disabled people, and in particular, some of the projects being promoted are expected to achieve good results by linking job creation for the disabled people and the senior citizens. Gwangyang Works plans to promote 17 projects with local social welfare organizations such as the 1% Sharing Foundation and the Jeonnam Community Chest of Korea this year.

▲ Kimchi making event at the launching ceremony of the lunch box delivery project (left) and signing a business agreement between Gwangyang City and POSCO to promote volunteer work.

Gwangyang City signed a business agreement on June 3 with the idea of sympathizing with the sharing activities of the Gwangyang Works and promoting local volunteer work. Not only executives and employees of Gwangyang Works but also Gwangyang City will continue to work together to spread the sharing culture in the region.

Expansion of opportunities to enjoy local cultural performances
Gwangyang Works has sponsored and operated the Korean University Gugak Festival since 2008 to expand opportunities to enjoy local cultural content, securing the popularity of Korean traditional music, and inheriting and developing traditional culture. Following these efforts, the University Gugak Festival has established itself as a representative local festival.

▲ Performance of the winning team at the 11th University Gugak Festival in 2019.

The University Gugak Festival is the only Korean traditional music contest that discovers and supports young Korean traditional musicians targeting university students and graduate students and since 2014, the Minister prize by the Ministry of Culture, Sports and Tourism has been newly established and operated by raising the level of rewards. Unfortunately, various cultural performances including the University Gugak Festival are not currently held in the aftermath of COVID-19, but it plans to continue as a representative cultural performance in the region.

Global Good Citizenship Week

▲ A soil ball-making event for a local river purification held at Global Good Citizenship Week and moving-in ceremony of Zero Energy Hope House No. 240.

How was the scenery of Gwangyang Works during this year’s Global Good Citizenship Week? About 7,500 executives and employees of Gwangyang Works and partner companies and 40 talent volunteer groups participated in the volunteer work and this year, they carried out public interest activities focusing on environmental protection in line with the promotion direction. There were local river purification activities and Seomjingang River marine purification activities by throwing EM(microorganism) soil balls performed by labor and management, and the moving-in ceremony of Zero Energy Hope House No. 240. This project plans to remodel a total of 10 households this year, considering environmental aspects such as wall insulation construction, replacement of windows, and old boilers for low-income families.

A brand of POSCO Corporate Citizenship, which solves problems in the local community and develops together with local citizens, Community With POSCO! POSCO plans to continue to make the world a better place by practicing sincere sharing activities.

▲ Songjeong-ri, Pohang, where the convent, orphanage, and nursing home of the Handmaids of the Sacred Heart of Jesus were located

▲ Local residents and members of the convent (left); Children playing at the playground that is being demolished (right)

As the convent decided to move out of the land voluntarily, the local residents in the area also participated. Their consideration made possible the construction of the steelworks in the area still bearing the scars of war.

With gratitude and respect for the Handmaids of the Sacred Heart of Jesus, Pohang Works installed a signboard on May 20 in front of the Blast Furnace no.3, where the convent was formerly located. The signboard was made with stainless steel sheets produced at Pohang Works and completed with PosART, POSCO’s own high-resolution inkjet printing technology.

On the day when the signboard was first unveiled to the world, about 70 officials, including Soo-Hi Nam, Head of Pohang Works, and Aloysia Kim, Head of the Handmaids of the Sacred Heart of Jesus, visited POSCO. The guests took a tour of Pohang Works and looked around the old site of the convent, which was situated here 43 years ago.

On June 9, 1973, golden molten iron poured out of the tap of Pohang No. 1 blast furnace – for the first time in Korea’s history. This day was designated as Korean National Steel Day to commemorate the historical moment. As POSCO celebrates Steel Day 2020, the company is as ever full of gratitude and respect for the Handmaids of the Sacred Heart of Jesus, who had sacrificed to make POSCO what it is today. POSCO will always remember this and continue to make the best iron in the world.

Father Louis Deslandes: The Founder of the Handmaids of the Sacred Heart of Jesus

One day in June, more than 100 years ago, a stranger crossed the rough waves of the Korea Strait and arrived at Busan Port. This stranger was Louis Deslandes, a French Catholic priest. To preach the gospel to the lowest of society, Father Deslandes left his hometown in 1923 and set foot on this strange land, Joseon, which was a colony at that time.

▲ Father Louis Deslandes in his youth (left); and in his later years (right)

In the winter of 1935, Father Deslandes settled in a small village in Yeongcheon, Gyeongsangbuk-do Province, and gathered orphans and the sick elderly into a community called, “Sam-Duck-Dang,” which later became the Handmaids of the Sacred Heart of Jesus. Father Deslandes lived together with the sick and needy and cared for them.

A Home for the Outcasts of Society

During the Japanese colonial period, Father Deslandes could have led a comfortable and stable life being a foreign missionary, but he always chose to stay with the local people. He entrusted the church to the local people as well, always reminding them that ‘the owner of the church was not the priest but the Koreans, and the owner of the country was also Koreans.’ Father Deslandes never gave in to the oppression of the Japanese colonial government, even during his imprisonment (1941-1945).

▲ Orphans in front of the parsonage

▲ Father Louis Deslandes was a father to the children who lost their parents during the war.

Korea celebrated its independence in 1945, but another tragedy hit the nation just three months after moving the convent to Songjeong-ri, Pohang — the Korean War. The war left countless war orphans and severe poverty. Despite the ongoing hardships, Father Deslandes never gave up looking after people who needed help. He built an orphanage to look after the war orphans and a nursing home for the elderly who were abandoned. After seeing the harsh living conditions of leprosy patients, Father Deslandes wept with them and created a settlement for them. He also opened a soup kitchen and a clinic for those who had no home. The convent grew into the largest facility in the East before relocating.

▲ The convent opened a soup kitchen and a clinic for those suffering from sickness and poverty.

As an acknowledgment for his devotion, the Korean government awarded Father Louis Deslandes the Order of Cultural Merits in 1962, and the French government honored him with the Legion of Honour, the highest French order of merit for military and civil merits, in 1969.

The smart safety helmets which POSCO developed in-house are essentially a ‘smart’ version of regular safety helmets where a ‘smart’ band is attached to the helmet. Jung-Hoon Lee from POSCO’s Smart Solution Task Force Team oversaw the production and explains how POSCO developed the device. POSCO Newsroom reports.

┃The Beginning

The idea for smart safety helmets was initially born out of POSCO ‘s Smart Safety Ideation Contest in 2016. Various ideas on smart technology application for worksite safety emerged, and smart safety helmets were considered a breakthrough.

“Based on the idea from the initial concept stage, we started building prototypes. Since safety helmets are mandatory at all production sites, we sought to promote extra efficiency in preventing worksite hazards by adding smart functions.

To create the current wearable version, the R & D team went through countless trial and error. During the prototype stage, there were only design concepts in which POSCO employees’ contribution was central. Designing –and building– various safety-related IoT sensors in short timespan proved to be challenging.

“Applying ‘All-In-One’ method on a single band added too much weight to the helmet. We also tried connecting a cable to a smartphone to operate sensors while communicating with the server. But the employees’ feedback was that the helmets were heavy and the wires impeded with their performance. It took a lot of time and effort until the current wireless version was produced.”

┃Smart Helmets, Smart Operation

The smart helmet comes with 15 components such as camera, lantern, gas detector, high-voltage detector, vibration motor, wireless in-ear microphone, smart tag, etc.

On the front side, a camera is attached to the smart band allowing full visibility from the control room for all corners of the production sites. The LED lantern attached around the camera enables image recording in darkness. The recorded images can be played back on smartphones, control rooms, and offices.

“Throughout the development process – from the initial ideation stage to the current wireless device via wired-version – we actively sought feedback from the employees in the field. We held evaluation sessions with mock-ups and discussed design and functions in detail. After months of relentless testing, we focused on making the helmet lightweight and wireless. During the process, we only left the most essential functions: the current features including emergency trigger, voice call, CO detectors, etc.”

The CO and O2 detector attached to the rear of the helmet measures harmful gas and oxygen concentration level – and SOS button can be activated in case of emergency.

┃A Helmet That Looks to the Future

With the support from Yangso Safety Disaster Prevention Group, 50 units of smart safety helmets had been deployed to Pohang Works and Gwangyang Works respectively. The current wireless headsets will be tested early next year from which point future development directions will be discussed.

The helmet detects harmful gas even in situations where a portable gas detector isn’t mandatory, and it can help evaluate on-site situations as it enables video calls between the field and the control room during the inspection. In this way, POSCO plans to regularly monitor the VoC (Voice of Customer) in order to constantly optimize the device by discovering actual cases from the field.

In the era of Fourth Industrial Revolution, POSCO is in the process of completing Smart Factory. For the past three years, the company has devoted more than 1 billion KRW (approx. $ 899.7 million) to safety, recruited safety and health experts, newly established departments dedicated to safety, and upgraded safety equipment to prevent major disasters. As a company that prioritizes corporate citizenship, safety is and always will be POSCO’s foundational principle as it steps forward into the Fourth Revolution and beyond.

It all started 49 years ago in a small fishing village on the East coast of Korea and has grown to be the fourth-largest steel producer in the world.

A Small Fishing Village with 39 Employees

To help rebuild the country after the end of the Korean War, President Park Chung-hee made steel production and heavy industry the centerpiece of his Second Five Year Plan (1967-1971). Despite there being no steel industry in Korea, President Park wanted to be able to manufacture steel domestically without relying on imports and foreign technology.

Opening of POSCO in April 1968

In 1965, President Park visited Pittsburgh, PA, where he gained insight into the steel industry and what would be required if Korea were to develop its own independent production facilities. One year later, Korea International Steel Associates (KISA) was formed. KISA included a consortium of eight companies from five different countries whose goal was to help Korea start its own integrated steelmaking facility. By 1967, the government approved a plan from KISA that included a basic agreement on technology & funding.

Pohang, a small fishing village on Korea’s eastern coast, was chosen as the official site of the steel mill. POSCO was officially incorporated on April 1, 1968, as a joint public-private venture with just 39 employees. Park Tae-joon came on board to serve as CEO and by May 1968, construction of POSCO’s headquarters had begun.

In May 1968 the POSCO headquarters construction had begun

Setbacks to Success  

Despite the steps taken to move Korea’s steel industry forward, there were many setbacks along the way. First, overshadowing each step of its development was the skepticism coming from both foreign and domestic fronts. Foreign investors could not understand why Korea would expand into industries it had no history with. And local leaders doubted their ability to overcome all of the technological, economic, and infrastructural hurdles facing them. To make matters worse, KISA was disbanded in September 1969 – leaving plans for POSCO up in the air.

Korean President Park Chung-hee was instrumental in getting POSCO off of the ground. Here he is at one of the blast furnaces at Pohang Works. (1976)

Determined to complete the project, President Park began negotiations with Japan who later provided the grants, loans, and technology for the construction of the initial plant. Construction of the steel mill started in 1970 and on June 9, 1973, at 7:30 am, the first steel came off of the line. By April 1974, they had decided to expand the capacity of the third furnace at Pohang Words to 5.5 million tons and the fourth furnace capacity was increased to 8.5 million tons.

Expansion

Because of POSCO’s early successes, the Korean government decided to build a second facility on the peninsula’s southern coast in Gwangyang. After the completion of the fourth phase of construction at Gwangyang, POSCO had a total of 20.8 million tons of crude steel production capacity. Of that total, Pohang was producing 9.4 million tons with Gwangyang producing 11.4 million tons. It earned the distinction of being the world’s largest steel mill and POSCO become one of the main driving forces behind the industrialization of Korea’s economy.

After its completion, Gwangyang Works was the largest integrated steel mill in the world. (1992)

In 1986, POSCO entered into a 50/50 joint venture with US Steel (UPI). Their partnership was set to develop a comprehensive modernization program that would upgrade the processes and equipment of the facility. Since the establishment of USS-POSCO Industries (UPI), POSCO has continued to branch out all over the globe. It has set up STS production plants at Zhangjiagang Pohang Stainless Steel (China) and POSCO Tai Knox (Thailand), and automotive steel plate production lines (CGL) in Mexico, India, and China. PT Krakatau POSCO was built in 2013 and was the first integrated steel mill in Southeast Asia.

POSCO Becomes the Most Competitive Steelmaker in the World

By 2014, production capacity had increased to 37.7 million tons. Pohang now has three heavy plate mills, four cold rolling mills, five blast furnaces, heavy plate mills, and four hot rolling mills. Beyond its scope and production capacities, POSCO is committed to developing advanced, high-quality World Premium Products. In addition, POSCO’s innovations in other industries, integration of smart factory technologies into the production process, and its commitment to local communities continue to push POSCO forward.

Advanced World Premium Products

With a focus on advanced steel solutions, POSCO has developed a wide range of products that can be customized to fit a customer’s unique needs. These World Premium Products are the reason POSCO has been listed as the most competitive steelmaker for seven years in a row. For example, PosMAC has been utilized in many different ways from floating solar cells to durable public art pieces. Also, POSCO’s award winning PosCozy floor plates provide soundproofing and heat insulation.

The hot rolling process at Gwangyang produces 3,400,000 tons per year

Lithium Extraction & Other Ventures

POSCO has also strengthened its global competitiveness by accelerating new businesses in the materials and energy industries. POSCO has developed a fuel cell plant that was completed in 2008, a Myanmar gas field that produces 500 million cubic feet of gas each day, and lithium extraction technology that is 10 times faster than previous methods.

Solution Marketing

In addition to manufacturing advanced, high-quality steel, POSCO’s Solution Marketing provides customers with added technology solutions and commercial support. Instead of just supplying products and stepping away from the customer, POSCO works with its customers to create customized solutions that ensure successful implementation. Partnering with manufacturers early on in the production process, POSCO has stepped beyond its role as a steel supplier and now serves as a solutions provider.

Smart Factory Technology

POSCO also incorporates cutting edge technology and innovations into its production processes. At its automotive steel plate factory in Gwangyang, POSCO introduced AI technology into its coating weight control system, improving quality and reducing waste. Also, POSCO CEO Ohjoon Kwon remains committed to developing more smart factory solutions and has been meeting with executives of other companies, such as GE and Siemens, to explore partnerships and best practices.

President Park Chung-hee comes to POSCO to celebrate the opening of Pohang Works

Someone seeing the successes of POSCO today might have a hard time understanding how it even started, much less how it was able to overcome the immense barriers it faced. POSCO continues to be a leader in the steel industry with its advanced, high-quality World Premium Products. Also, POSCO’s successes in its non-steel ventures show its commitment to remaining on the cutting edge of technological trends and industrial innovation. Watch the video below to see for yourself.

https://www.youtube.com/watch?v=nq574Ivp7c0

1. Announcing ‘Innovation POSCO 2.0’: Accelerating Business Restructuring
In July, POSCO announced “Innovation POSCO 2.0,” which included five major management reform plans and focused on restoring public trust and securing core competitiveness for the next 50 years. After the announcement, POSCO resolved to overcome crises by holding a briefing on management reform plans and a resolution meeting. POSCO also implemented large-scale company restructuring in August to improved organizational efficiency. Meanwhile, CEO Ohjoon Kwon and executives took the lead in overcoming the management crisis by giving up part of their salaries and repurchasing treasury stocks.

2. POSCO Sold 38 Percent Stake in POSCO E&C to PIF in Saudi Arabia
POSCO sold a 38 percent stake in POSCO E&C to Saudi Arabia’s Public Investment Fund (PIF) in exchange for the sales amount of 1.24 trillion won on September 30. The PIF investment is expected to bring positive improvement to POSCO in its financial structure, and the PIF can rapidly respond to the post-oil era in Saudi Arabia. POSCO E&C and PIF opened a joint operation, POSCO E&C Saudi Arabia (PECSA) in Saudi Arabia on December 21.
Related Article: POSCO Strengthens Business Alliance

3. Extension of Retirement Age to 60 and Introduction of Salary Peak System
POSCO extended the retirement age from 58 to 60, and introduced a 4–year salary peak system. Starting next year, the retirement age will be extended to 60, and according to the salary peak system, employees aged 56 will receive 90 percent of the amount they are paid at the age of 55. The salary will be reduced by 10 percent over the next two years. They will receive 80 percent at the age of 57, and 70 percent from the age of 58 through to 60. POSCO initiated salary peak system in 2011 and reached an agreement with labor on major labor innovation issues, such as the expansion of the salary peak system and a salary system restructuring based on performance.

4. POSCO Named World’s Most Competitive Steelmaker for Six Consecutive Years
POSCO was named the world’s most competitive steelmaker for the sixth consecutive year. The WSD (World Steel Dynamics) ranked 36 steelmakers from around the world by analyzing 23 categories, including production capacity, profitability and technology innovation. POSCO ranked at the top of the world-class steelmaker list, receiving the highest score in four categories, and an average of 7.91 points out of 10. POSCO received positive responses in its sales expansion of World Premium products and solutions marketing, proving POSCO is the world’s best steelmaker.
Related Article: POSCO Named World’s Most Competitive Steelmaker for 6th Consecutive Year

5. POSCO Exports Its Own CEM Technology Abroad for the First Time                                                                                                                                        POSCO signed an agreement on POSCO’s own compact endless casting and rolling mill (CEM) technology licensing and co-marketing with German engineering group, SMS on July 3. CEM is an innovative technology which produces hot rolled coils by integrating continuous casting and rolling process into one. According to the licensing agreement, POSCO will be paid a technology transfer fee from the SMS group, and engage in co-marketing efforts with SMS group for the sale of CEM technology.

6. Visible Progress in Solutions Marketing, Including EOLAB Project
The EOLAB Project, which succeeded in creating new demands by offering technologies for steel materials for car body and chassis, was selected as the best case of POSCO’s solutions marketing. The EOLAB Project is the result of POSCO’s constant effort to improve customer value by providing total solutions, from the development of new steel materials to the manufacturing of components. POSCO has been focusing on expanding its sales channel of World Premium products and improving customer value through human.
Related Article: Renault’s EOLAB Shines at 2015 Seoul Motor Show

7. Introducing ‘POSCO Masters,’ the Highest Honor Awarded to On-Site Engineers
POSCO selected its first POSCO Masters, who are equipped with professional knowledge, and have been leading on-site creative improvement activities and technical competitiveness. Beginning this year, the honorary recipients of the first POSCO Masters are Master Son Byoung-rak, EIC Technology Department at Pohang Works, Master Jo Gil-dong, Steelmaking Department at Gwangyang Works, Master Kwon Yung-kug, Hot Rolling Department at Pohang Works and Master Cho Young-ki, Ironmaking Department at Gwangyang Works. The four POSCO Masters will receive special benefits including treasury stocks, prize money, overseas couple trips and special promotions.

8. Making POSCO an Accident-Free Workplace through Self-Directed Safety Spread
POSCO set 2015 as the starting year for the settlement of its self-directed safety culture and has been striving for the realization of POSCO the Great through the expansion of safety Self-Directed Safety Spread (SSS) activities. POSCO held its “POSCO Family Safety SSS Festival” in January, and awarded prizes to excellent groups and individuals in August. POSCO takes the lead in making POSCO an accident-free workplace through constant safety SSS activities.

9. The 1st and 2nd Special Reward for Innovation POSCO Project
POSCO selected Construction Steel Materials Solution Project Team as the first recipient of Innovation POSCO (IP) Project’s special reward on July 23, awarding 150 million won of incentives for their achievement of excess profit. The IP Project special reward is given to the IP project team in proportion to the outcome, when achieving over 1 billion won of extra profit and the second special reward was awarded to PJT for the construction of a high profit PO-expanded production system in December.
Related Article: Innovation POSCO Grand Project Kick-Off

10. Cessation of POSCO Weekly, Smartization of Communication
POSCO Weekly, a weekly newspaper which delivered POSCO’s latest news and its development and innovation internally and externally for the past 21 years, ceased its publication on July 30. POSCO Today is serving the role of POSCO Weekly, creating POSCO’s unique communication culture, and delivering real-time news of POSCO to its employees. In line with the increased use of internet and mobile devices, POSCO Today is solidifying its position as a group-integrated communication channel, accommodating various needs of POSCO group employees.

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What does the iron making department do? Walk us through the role of manager!

The Iron making department is the core area of the first steelmaking process. The process of solidifying iron and coal is called sintering and coking, respectively. The pretreated iron and coal are stacked into layers in a 100m tall blast furnace. Then hot air at 1,200 degrees Celsius is blown into the furnace, causing the coal to burn which melts iron ore into molten iron.

I am currently working as an engineer for furnace 4. The furnace is the pressure vessel with high temperature and high pressure conditions. Therefore, it is usually not feasible to actually see the inside of the vessel. Therefore, it requires us to monitor the situation of inside the furnace through information obtained by numerous estimators and cameras. I am responsible for accurately determining the inside situation of the furnace and also optimizing the work efficiency so that the iron ore is produced and the related facilities are well operated. It sounds a bit difficult, right? To simplify, it is like putting the pieces of a puzzle together to create a beautiful drawing.

Pictured here: Jooyoung Cha at Pohang Works

What is the secret behind POSCO’s world-best iron-making department? 

 Pictured here: Jooyoung Cha working on site

I am more than confident to say that the iron ore making technology of POSCO is the best in the world. When POSCO established the steel mill on the wasteland in 1970 for the first time, they benchmarked facilities and technologies in Japan. However, the situation is different now. In the iron making field, a well-known steel making company named NSSMC in Japan tried to learn our outstanding technology.

In addition, many of former colleagues are currently serving as a consultant in foreign countries as more and more foreign entities are interested in recruiting them as technical advisors. Seeing the history of such outstanding technology, people at POSCO are not afraid of failure while pursuing something challenging or seeking creative solutions. We place priority on the ‘field’ and ‘performance,’ and are committed to improving the performance through cooperation. This is how POSCO became the top global leader in the field with the best technology.

What is so attractive about working at the iron making department?

Pictured here: Jooyoung Cha in her protective suit on site

Apparently I am the first female to work in Korea’s 1^st blast furnace in Pohang which started operating in 1973. Working as a female worker in a male dominated industry poses a challenge but is also exciting. My male colleagues have given me the nickname “Joan of Arc” after seeing me navigate the huge facilities. I was also given the nickname “Thatcher” after the Iron Lady, Margaret Thatcher. Quiet amusing, right? Pursuing a career where there are still few women is challenging, but I hope that I can inspire other young women to not be afraid and pursue challenges too

Pictured here: Jooyoung Cha overlooking Pohang Works

What are the core capabilities of the iron making department?

Pictured here: Jooyoung Cha having a discussion with her colleague

This is one of the questions I am asked the most. Every time I am asked the same question, I would compare it with caring for a baby. The iron making department is where we must manage and operate the blast furnace. The furnace can be comparable to a baby that requires care of parents at all times. This applies to furnaces as well. Employees at the iron making department take care of it to produce high quality materials by adding high quality iron ore or coke. Those working at the iron making department should be capable of accurately determining the situation and making decisions. Lastly, the work here requires a team effort rather than individual work. Therefore, interpersonal relationships and communication is crucial.

What was the toughest moment at work for you?

 Pictured here: Jooyoung Cha during work hours

When I first started working in the iron department, I had to stay awake for several nights because I need to figure out the problem source for poor gas flow of iron ore inside of the furnace. I realized that experience was very important. I was lucky to have experienced colleagues help me navigate the situation. I am now much more experienced in the field so that I can now help younger members of our team.

Tell us about your future aspirations. Any advice for those preparing to work in your field of work?

Pictured here: Jooyoung Cha monitoring the furnace

One word of advice I still keep close to me is: “We are workers. Facilities live with our sweat and effort.” My dream is to be a true worker. As a specialist in the field of iron making, I would like to have the ability to pay attention to details but also see the big picture. I hope that I can be a good mentor for those who are considering a career in engineering in the steel industry. Many assume that getting hired is the end to worries, but actually that is just the beginning!

For all the women who may be hesitant to pursue a male dominated career, we hope this Q&A session with POSCO’s Jooyoung was inspiring.

Pictured here: POSCO steel mill employee juxtaposed with steel production

Let’s take a look back at how POSCO came to be the foundation of the nation’s steel industry as well as one of the most respected companies!

 Founding Period: 1965~1969

Pictured here: 1965.12 – Four countries including U.S. & U.K. convene to establish KISA / 1967.7 – Pohang is selected as site for steel mill / 1967.11 – Steel Industry Committee is established

The growth of POSCO happened at the same time as the growth of Korea. The 1960s was a period when poverty and chaos plagued the nation. However, through steadfast hard work and perseverance, steel became the foundation of a strong economy. Just three years after the launch of Korea International Steel Association (KISA), POSCO was born in 1968.

Establishing Pohang: 1970~1981

Pictured here: 1976.5 – Pohang Works under construction / 1978.12 – Phase 3 of Pohang Works construction completed / 1981.2 – Phase 4 of Pohang Works construction completed

Building steel mills was a daunting task but that did not deter POSCO from finishing it. Through four stages of construction, Pohang Works was completed. For more information on Pohang Works check out our previous post

Establishing Gwangyang: 1982~1992

Pictured here: 1985.3 – Beginning of Gwangyang phase 1 construction / 1978.12 – Establishment of Pohang University of Science & Technology / 1987.5 – Phase 1of Gwangyang Works construction completed

Despite the global economic depression of the 1970s, Korea’s economy flourished and steel business boomed. With experience in building Pohang Works, POSCO had the capabilities and know-how to establish Gwangyang Works.

Building on Great History: 1993~

Pictured here: 1994.10 – POSCO listed on the NY stock exchange / 1995.9 – POSCO Center in Seoul Opens / 2000.10 – Privatization of the company

Since its early beginnings, POSCO has come long ways. In efforts to become number one, POSCO has been contributing monumental achievements to the global steel industry.

Pictured here: Molten iron being transformed into high-quality steel

It has been recognized among the Top 100 Davos Forum Global Companies, #1 by Forbes Magazine as the Most Respected Korean Company and #1 Most Competitive Steel Manufacturer by World Steel Dynamics.

Pictured here: Still shots from the POSCO film which portrays steel which surrounds us in everyday products

In celebration of POSCO’s foundation day, we’d like to share a video about the roots of POSCO.

POSCO has made monumental achievements to the global steel industry by creating world’s best, world’s first technologies. Its products are recognized as one of the most competitive in the global market. As the first to develop Automobile PosM Steel technology, POSCO has made advancements in safety and weight reductions in automobiles.

Beyond being the number one steel company, POSCO is also looking towards the future for transformation and growth. POSCO is strategically pursuing opportunities in the energy and integrated materials business. It is also exerting efforts to increase competitiveness and efficiency in the renewable energy sector. POSCO is also gaining ground in the energy market with applicable high-quality products that can withstand extreme environments.

Pictured here: Finished high-quality steel products inside one of POSCO’s steel mills

POSCO’s Focus on Mutual Growth & Coexistence

POSCO understands that we live in an era where sharing and mutual understanding is essential. POSCO’s goal is to flourish with those who have been working with us to create a better world. To do this it has set improving the earth’s environment and giving back to the community as key goals.

We ask for your support as POSCO continues to build upon its rich history. Celebrating POSCO’s 46 years and recent inauguration of CEO Ohjoon Kwon, we are excited to bring “POSCO the Great” to life.

Pictured here: Scene from one of POSCO’s steel plants

Steel is one of the most common and useful metals. But do you know how it is actually made? Let’s go behind the scenes of one of the world’s leading steelmakers, POSCO, to discover the process of how steel is made.

Pictured here: Gwangyang Works is a world leading works with optimal layout to specialize in the production of automotive steel

The 3 Step Steelmaking Processes

For easier understanding, steel is made through 3 different stages which are ironmaking, steelmaking and rolling (continuous casting processes).

1)      Ironmaking: a process of smelting iron ores into hot metal.

Iron ore and coal are gathered from all around the world and unloaded onto the raw materials dock.

Pictured here: Dock where iron ore and coal are gathered

For proper heat transfusion in the blast furnace, iron and coal must be solidified from their powder form. The process of solidifying iron and coal is called sintering and coking, respectively. The pretreated iron and coal are stacked into layers in a 100m tall blast furnace. Then hot air at 1,200 degrees Celsius is blown into the furnace, causing the coal to burn which melts iron ore into molten iron.

Pictured here: 100m tall blast furnace where iron ore melts into molten iron

 2)      Steelmaking: a process of removing impurities from hot metal to create crude steel.

The molten iron created in the blast furnace contains various impurities that diminish its strength and durability once it is hardened into steel. The molten iron from the blast furnace is transported into a torpedo car and poured into a converter furnace.

Pictured here: The molten iron from the blast furnace is transported into a torpedo car to be taken to a converter furnace

In the converter furnace, pure oxygen is added to burn off substances such as carbon, phosphorous and sulfur to create purified molten steel. At this point, the temperature and substance composition is precisely adjusted to customer’s various demands.

Pictured here: Molten iron being poured into a converter furnace to be purified

Pouring the molten steel into molds and cooling into solid creates a semi-finished material called slabs which are used to make finished steel products.

Pictured here: Molten steel being created into slabs

Solid steel is categorized based on shape. Slabs are wide and flat. Blooms are rectangular bars and billets are thinner, square bars.

3)      Rolling: a process of pressure forming crude steel into various finished products.

The final stage of the steelmaking process involves continuous casting where steel is forged into various steel products. Through the process of rolling, steel can be treated differently to be put to a variety of uses.

Pictured here: Slabs being passed between rollers to turn crude steel into finished products

What is steel used for?

POSCO steel products are used in every part of our daily lives ranging from buildings to smartphones to satellites in space.

The different types of products that can be created include:

1)      Hot-rolled products

2)      Cold-rolled products

3)      Coated Steel

4)      Electrical Steel Plates

5)      Steel Plates

6)      Wire Goods

7)      Stainless Steel

Read on to find out more about the steel products around us.

Hot-rolled products are made from slabs passed through rollers above 1,100 degrees Celsius. These are used for construction materials and pipes in various industries.

Cold-rolled products which are created by making hot rolled products thinner at room temperature are used in general appliances, barrels and automobile frames.

Coated steel which is created by coating cold rolled products with zinc are used in high end appliances, office equipment and automobile exteriors. 

Electrical steel plates are created by adding electrical properties are used in transformers and motors. 

Steel plates which are thick and rectangular in shape are used in large structures such as buildings, vessels and oil pipelines. 

Wired goods are created when billets are passed through a roll with a round hole and is used for automobile tire cords, wires for bridges, piano strings, underwater cables and more. 

When nickel and chrome are added to steel it produces stainless steel which are used in kitchen appliances, medical equipment, exterior walls and roofs of buildings. 

POSCO Ushers in Era of New, Eco-friendly Technologies 

Pictured here: Pohang Works, the root and heart of the Korean steel industry.

POSCO was the first in the world to use a more economical and eco-friendly method of steelmaking compared to a blast furnace. The FINEX method uses iron ore and coal in its original form, skipping the coking and sintering processes. 

Pohang Works is driving innovations in steel technology and leading in production of high quality products. It operates a state of the arts R&D center and production monitoring center that monitors production 24/7. 

In addition, there is an Environmental Center that monitors emissions of pollutants in real time. 

Click on the videos below to see the full steelmaking process at POSCO’s Gwangyang Works and Pohang Works, the root and heart of the Korean steel industry.