POSCO will actively expand facility investment aimed at saving energy and developing energy saving steel products, reducing energy consumption by approximately 1.3 million Ton of Oil Equivalent (TOE) by 2008.
Since implementing an earlier agreement between the Korean government, POSCO has reduced energy consumption by 1,255,000 TOE from 1999 to 2003. With an aim of conserving 290,000 TOE in 2004, the company will reduce total energy consumption by 1.3 million TOE by 2008. To meet this goal, POSCO will actively invest in energy saving facilities and focus on developing innovative processes that will streamline the steelmaking process.
POSCO will enhance electric power generation efficiency by 8%, generating electric power from exhaust gas and other gasses that are produced during the steelmaking process. The company will invest a total of 760 billion KRW (661 million USD) in 153 energy saving facilities by 2008, including replacing rolling lines with highly efficient heating furnaces and electric motors.
The company will complete its Strip Casting facility with an annual production capacity of 600,000 tons by June 2006. Designed to manufacture thin steel sheet directly from molten iron, omitting the hot rolling process, the facility is expected to save 30,000 TOE per year.
Construction of POSCO’s FINEX facility with an annual production capacity of 1.5 million tons is expected to be completed by the end of 2006. FINEX is an innovative process to manufacture molten iron directly from iron ore powder and coal, omitting the sintering and coking processes. This process is expected to significantly reduce the emission of nitrogen oxide and arsenic acid dust as well as cut production costs.
In addition to the company’s own energy saving efforts, POSCO also strives to develop energy saving products for its customers. This alone is expected to reduce overall energy consumption by around 2,000,000 TOE annually.
Production of high class electric steel sheet will increase to 250,000 tons by 2008. Since this material prevents excessive loss of electric power, the efficiency of electric motors and transformers produced from it will result in an energy reduction of 1.1 million TOE annually. Additionally, the production of high-tension automotive steel will enable car makers to produce cars that are an average of 21kg lighter, with an energy reduction of 900,000 TOE because of decreased fuel requirements.
Coal used as a raw material for steelmaking currently accounts for 90% of POSCO’s annual energy consumption of 15.9 million TOE. The remainder includes electricity and other sources. 83% of the company’s energy is generated by gas produced during the steelmaking process and isolated LNG power generation. The remaining 17% is purchased from Korea Electric Power Corporation.
As energy costs are expected to increase due to a hike in coal prices, POSCO will aggressively engage in energy reduction activities in a bid to secure its high ranking competitive position.
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