POSCO Supercharges Green Innovation with Massive Hydrogen & Battery Production Investment

POSCO Holdings Inc. has announced its plan to invest 121 trillion won (US$92 billion) by 2030, claiming to strengthen its competitiveness in the steelmaking industry and foster new growth opportunities. POSCO’s investment strategy encompasses not only its core steelmaking business but also the development of rechargeable battery production and the “hydrogen business,” which will play a crucial role in achieving the company’s carbon neutrality target by 2050.

The leading steelmaker in South Korea intends to allocate over 60 per cent of the total investment, approximately 73 trillion won, to its domestic operations.

As part of its efforts, POSCO plans to establish a hydrogen reduction ironmaking facility, called HyRex, by 2026, to commercialize it by 2030. The estimated cost of implementing nine HyRex facilities and related equipment amounts to 40 trillion won. HyRex employs hydrogen to convert fine iron ore into direct reduced iron, which is then used in an electric smelting furnace to produce hot metal. The aim is to achieve nearly zero carbon dioxide (CO2) emissions by utilizing CO2-free hydrogen and electricity.

Venturing into green energy is not new for POSCO. The company has already revealed plans to become a major hydrogen producer globally by manufacturing 7 million tons of hydrogen by 2025.

Additionally, POSCO Holdings Inc. recently announced a collaboration with a Chinese partner to invest 1.5 trillion won (US$1.16 billion) in the manufacturing of nickel and precursor materials for secondary batteries. The joint venture, involving POSCO Holdings and its subsidiary POSCO Future M Co., planned to establish factories in South Korea’s city of Pohang in cooperation with CNGR Advanced Materials Co. Once operational, each factory will have an annual production capacity of 50,000 tons of nickel and 110,000 tons of precursors. These materials are essential components for the production of cathodes, which significantly influence the power and range of electric vehicle (EV) batteries. The production capacity of the factories will enable battery manufacturers to create cells for approximately 1.2 million EVs.

Precursors, consisting of nickel, cobalt, manganese, and aluminium, play a critical role in the production of cathodes. They account for 65-70 per cent of the overall cost of cathodes.

Last year, the firm also ventured into the battery recycling sector. POSCO Holdings entered an agreement with GS Energy for the establishment of a secondary battery recycling joint venture called ‘POSCO-GS Eco Materials‘.