POSCO is staking everything on normalizing the Pohang Steelworks, where worker fatalities have occurred due to a string of safety accidents. It restarted the No. 3 FINEX plant ahead of schedule, which had been partially overhauled with a target of year-end. Early next year, it plans to break ground on a demonstration facility for commercialization of hydrogen reduction steelmaking (HyREX). Through an earlier-than-usual executive reshuffle, a new head of Pohang Steelworks was appointed just two weeks after the post became vacant.
According to POSCO Group on the 15th, the No. 3 FINEX plant at Pohang Steelworks began restarting on the 9th. The plant suffered an explosion and fire in Nov. last year and had been partially overhauled for more than a year. It was originally scheduled to restart at the end of this month, but the timing was moved up somewhat.
FINEX is an innovative steelmaking process developed in-house by POSCO. The conventional blast furnace process required separate sintering and coke processes to agglomerate fine iron ore and bituminous coal, but FINEX eliminated these two processes, significantly reducing production expense and environmental pollution.
POSCO decided to halt operation of the No. 2 FINEX plant at Pohang Steelworks at the end of this year. That is because the No. 3 FINEX has an annual output of 2 million tons (t), while the No. 2 FINEX is limited to 1.5 million t. FINEX has relatively high maintenance expense, and in the case of the No. 2 FINEX, the smaller scale of the facility was found to be a burden on profitability.
After Chair Chang In-hwa took office last year, POSCO set a goal of cutting costs in the steel institutional sector by more than 1 trillion won every year. Accordingly, last year it closed Steelmaking Plant No. 1 and Wire Rod Plant No. 1 at Pohang Steelworks.
A POSCO official said, "It was judged appropriate to keep the No. 3 FINEX running because its output is above a certain level, but we reached a different conclusion for the No. 2 FINEX," adding, "We concentrated on partial overhauls of the No. 3 FINEX and began restarting it faster than expected."
POSCO plans to break ground early next year on the HyREX demonstration facility (demo plant). The total construction expense for the facility is 850 billion won, of which 300 billion won will be supported by the government. In June last year, the HyREX demonstration project led by the Ministry of Trade and Industry (MOTI) passed a preliminary feasibility study, leading to the groundbreaking decision.
HyREX separates (reduces) oxygen from iron ore using hydrogen to make iron, a technology that can realize "carbon-free steelmaking." While the traditional method uses coal (coke) as a reducing agent and inevitably emits large amounts of carbon dioxide, HyREX uses hydrogen and emits only water (H₂O).
Using hydrogen instead of coal can theoretically eliminate the 2 tons of carbon emitted per 1 t of steel produced. As a heat source, it uses electricity to produce molten iron in an electric smelting furnace (ESF). The ESF is equipment with additional design features that allow component control on a standard electric furnace.
Currently, the hydrogen industry faces a slew of challenges, including high expense in production and distribution, large-scale infrastructure development, and complete localization of core technologies. For POSCO as well, the top priority is to lower the hydrogen production cost while building efficient and stable infrastructure.
The government decided to promote the HyREX demonstration facility project with POSCO in connection with the government's demonstration program. POSCO plans to operate this facility in 2028 and develop commercialization technology with a target of 2030. The target output is 300,000 t. The specific scale of the facility has not been disclosed because design work is currently underway.
This year, POSCO also carried out its executive appointments somewhat earlier than last year (Dec. 23), implementing them on the 5th and appointing a new head of Pohang Steelworks. Park Nam-sik, deputy head in charge of process quality at Pohang Steelworks, was promoted to head. After a hazardous gas incident at Pohang Steelworks on Nov. 20 resulted in casualties, the previous head was replaced, and Lee Hee-geun, POSCO's president, had been serving concurrently as head.
At the inauguration ceremony held at POSCO headquarters on the 9th, new head Park Nam-sik said, "Based on safety, communication, innovation, and mutual growth, I will build a sustainable steelworks," adding, "For a safe steelworks, we will clarify roles and responsibilities at each work stage to eliminate blind spots in safety management."
Meanwhile, POSCO's Pohang Steelworks has struggled since suffering flooding from Typhoon Hinnamnor in 2022. At the time, all blast furnaces and most production facilities were submerged, halting operations for 135 days. The damage was estimated at the 2 trillion won level.
Since then, fires large and small have followed. In Dec. 2023, a fire at the steelworks halted three blast furnaces, and in Jan. and Feb. 2024, fires broke out in plant communication lines and coal conveying facilities. The fire at the No. 3 FINEX plant occurred in Nov. 2024.
This year, in March, a worker at a subsidiary died in a crushing accident involving equipment, and in Nov., two consecutive hazardous-material release accidents occurred. On the 5th of last month, one worker from a partner company of POSCO DX died in a hydrofluoric acid accident, and on the 20th, during sludge (residue) cleaning work, a hazardous gas incident left three people in cardiac arrest.