OREANDA-NEWS. July 04, 2013. POSCO will stably be supplied with aluminum-ferrosilicon (FeSiAl), used as deoxidants in steelmaking, from Kyrgyzstan of Central Asia which possesses abundant mineral resources.

POSCO, the Kyrgyzstan government, and Kazakhstan National Mineral Processing Research Center signed an MOU on supplying POSCO with parts of the products produced from the aluminum-ferrosilicion production facilities at the Kyrgyzstan Prime Minister`s office

CEO Chung Joonyang joined Kyrgyzstan Prime Minister Zhantoro Satybaldiyev, while President Kim Junshik, Kyrgyzstan Minister Temir Sariev of the Ministry of Economy, and Kazakhstan National Mineral Processing Research Center Abdrassul A. Zharmenov signed the MOU.

Aluminum-ferrosilicon removes oxygen from the steel production process, increasing the steel`s purity as an additive while Kazakhstan`s government operated Mineral Processing Research Center possesses the world`s first patent. This project has been carried out as part of the economic development project between Kyrgyzstan and Kazakhstan, and POSCO was able to participate with the request of both governments` request based on the company`s recognition and purchase ability.

By participating in this project, POSCO will be able to utilize Kyrgyzstan`s low cost labor and electric power use, as well as tax benefits, and d combine Kazakhstan`s high mineral resource development technology to secure substitute material at about 25% lower in costs.

POSCO has been purchasing ferrosilicon for steelmaking deoxidants from China. Through this, POSCO can purchase up to 14,000 tons or 20% of the production capacity from the plant to start operation in Tashkumor, Kyrgyzstan, expecting more than 10 billion KRW in cost reduction. POSCO especially instead of acquiring shares is offering a loan of 25 million USD of the 98 million USD investment costs to secure aluminum-ferrosilicon purchase rights, reducing potential risk of carrying out the project.

POSCO will provide a loan with the Kazakhstan government`s real estate as collateral, receiving 5% interest for the next five years and spread repayments after 5 years.