POSCO Group, ranked number one in Korea, has confirmed its investment in Hyundai Motor Group’s steel plant in Louisiana, USA. The two groups will also collaborate on research and development (R&D) for producing steel products with significantly reduced carbon emissions. Additionally, they have agreed to cooperate intensively in the secondary battery materials business, including lithium production and anode/cathode materials. This marks a comprehensive collaboration between Hyundai (ranked third in the business sector) and POSCO Group (ranked fifth), using steel, an automotive material, and batteries as connectors.
On the 21st, Hyundai Motor and POSCO Group held a signing ceremony for a Memorandum of Understanding (MOU) for mutual cooperation in the steel and secondary battery sectors at Hyundai’s headquarters on Gangnam-daero, Seoul. The MOU was attended by key executives from both groups, including Han Seok-won, Head of Planning & Coordination at Hyundai Motor Group (Vice President), and Lee Joo-tae, Head of Future Strategy at POSCO Holdings (CEO).
The core of this MOU is the companies’ first foray into overseas joint investment and production, responding to the U.S. government’s tariff policy, which began imposing a 25% tariff on imported steel products. Hyundai Motor Group indicated it would raise half of the 8.5 trillion KRW investment in the Louisiana steel plant from affiliates like Hyundai Steel and external investors, with POSCO as a major external investor. The remaining funds will be raised through borrowing.
POSCO is negotiating the specifics of its investment amount and equity stake. There is a possibility of adding more external investors to the Louisiana steel plant equity investment, as ArcelorMittal, the world’s second-largest steel company, has shown interest.
Hyundai Motor Group aims to mitigate the investment risk of 8.5 trillion KRW, while POSCO is evaluated positively for securing a production base in the U.S. Building a plant locally in the U.S. would exempt them from the 25% tariff that came into effect last month. POSCO Group has been consistently exploring joint ventures and equity investments to establish a local production base.
The two groups will also cooperate in the field of secondary battery materials. POSCO owns lithium mines and conducts business in secondary battery materials, such as anode and cathode materials, through POSCO Future M. Hyundai Motor Group is pushing to directly procure anode and cathode materials for secondary batteries from suppliers. They aim to develop the optimal battery for their electric vehicles through research on battery design and production methods. They are also building a pilot line in Anseong capable of producing 10,000 to 20,000 units.
The two companies plan to carry out joint R&D as well. Expectations are that this will expand to future projects like hydrogen reduction steelmaking and other joint research and development (R&D).
Reporter: Kim Woo-seop