Nippon Steel, POSCO Agree for Further Partnership

Nippon Steel and POSCO announced on Friday they agreed for further partnership including supplying semi-finished steel each other during blast furnace relining. They ship total 1-1.2 million tonnes of semi-finished steel in 5 years. Nippon Steel expects the additional cooperation including joint utilize dust recycling system of Nippon Steel will improve the profit by more than 10 billion yen per year. They talk for additional cooperation items in raw materials procurement and will realize them step by step. They purchase the partners’ share for around 55 billion yen each other, which they will become leading shareholders for the partners each other, and step into further closer tie-up.They plan 3 blast furnaces relining each other in 5 years. They plan to reline the total 6 furnace in turn to avoid output reduction and to stabilize upper stream operations by supporting each other. They will ship 200,000 tonnes of semi-finished steel each other in fiscal 2007 starting April 2007 for the tie-up. They also agreed to use dry-dust recycling system jointly. POSCO will introduce Nippon Steel type of Rotary Hearth Furnace with annual 200,000 tonne of treating capacity in Pohang and Gwangyang works to recycle dust from integrated steel processes. Nippon Steel will purchase a part of the produced hot briquette iron from POSCO. For smooth tie-up, Nippon Steel will purchase around 2% share of POSCO and POSCO will purchase around 1.7% share of Nippon Steel. Nippon Steel, which has already 3.32% interest in POSCO, will be leading shareholder of POSCO and POSCO, which has 2.17% interest in Nippon Steel, will be top shareholder of Nippon Steel.