POSCO Group is moving to cooperate with Cleveland-Cliffs, the No. 2 steelmaker in the United States. The steel industry expects POSCO to invest funds in the trillion-won range to acquire equity in Cleveland-Cliffs. After the Donald Trump administration in the United States imposed a 50% tariff on imported steel, the idea is to work with a U.S. steelmaker to produce within the United States and break through the high tariff.
Cleveland-Cliffs said in a statement posted on its website on the 30th (local time), "We signed a memorandum of understanding (MOU) for a strategic partnership with POSCO on Sept. 17," and added, "With the recent conclusion of U.S.-Korea tariff talks, cooperation in the industrial sectors of both countries will be further strengthened through the partnership between POSCO and Cleveland-Cliffs."
Cleveland-Cliffs said, "Through this partnership, POSCO can expand its existing customer base in the United States while ensuring that its products meet U.S. trade and rules-of-origin requirements," and added, "This cooperation is a best practice for (America's) allies to deepen industrial cooperation under fair and transparent trade principles, and it aligns with the United States' policy goals of strengthening domestic industry and attracting foreign investment." It continued, "The two companies' final agreement is scheduled to be officially announced in the fourth quarter of this year or the first quarter of 2026, and the transaction is expected to be completed next year."
Cleveland-Cliffs is a steel company founded in 1847 in Cleveland, Ohio, by Samuel Livingston Mather. It began as the Cleveland Iron Company and, in 1890, merged with the Cliffs Iron Company run by Jeptha Homer Wade to become Cleveland-Cliffs.
Cleveland-Cliffs owns iron ore mines and has a vertically integrated structure from iron ore mining to steelmaking and rolling. It focuses mainly on high value-added products for the automotive industry and employs about 30,000 people in the United States and Canada. Along with US Steel, which was acquired by Nippon Steel, it is one of the largest steelmakers in the United States.
According to the steel industry, POSCO Group appears set to acquire 20% equity in Cleveland-Cliffs. By acquiring equity at a near-partnership level, it aims to create a structure that can avoid the impact of the tariff through Cleveland-Cliffs. As of the day, Cleveland-Cliffs' market capitalization was about $6.065 billion (about 8.64 trillion won). Acquiring 20% equity would require about 1.7 trillion won. As of June 30, POSCO Holdings' cash and cash equivalents stood at 6.6 trillion won, suggesting ample capacity to invest.
Earlier, POSCO Holdings said during its third-quarter earnings conference call on the 27th that it plans to secure additional cash. At the time, POSCO Holdings said, "In the third quarter, we reorganized a total of seven low-return, noncore asset structures to generate about 400 billion won in cash," and added, "Through an additional 63 restructuring cases by 2027, we will generate an additional 1.2 trillion won in cash and strengthen the group's financial soundness."
However, a POSCO Group official said, "As part of overseas investment to preempt high-return markets, we signed an MOU for mutual cooperation in the North American market, and we plan to flesh out the details going forward."