Posco's Pohang plant to be fully operational in early 2023

Economy

Published: 14 Nov. 2022, 17:23 Updated: 15 Nov. 2022, 13:33

Posco's Pohang plant to be fully operational in early 2023

Firefighters help clean up at Posco's Pohang steel mill in North Gyeongsang on Monday. [NEWS1]

A Posco steel plant in Pohang damaged in a September typhoon is unlikely to be operational again until early next year.

The company has been aiming for an end-of-the-year return to normal.

According to the Ministry of Trade, Industry and Energy on Monday, three blast furnaces and six out of 18 steel-processing facilities are back online at the Pohang site. Nine are expected to be up and running this year.

Other facilities, including an electroplating line, are expected to be fully restored in the first half of 2023.

One of the key problems is that the facility currently being worked on is old. Posco has to decide whether to fix it or just scrap it.

Posco is estimated to have lost 2 trillion won ($1.5 billion) in revenue and its subcontractors 250 billion won due to the shutdown.

The government said the nation's steel supply will not be affected.

“A major supply disruption is unlikely at least until the end of this year,” said Vice Minister Jang Young-jin. “Also, there have been support measures, including 170.7 billion won of liquidity aid.”

The vice minister said the government is closely monitoring the situation as the delay of the full recovery of the plant could affect other companies, including shipbuilders.

The government said it will review measures that would mandate key industries, such as steelmaking, to develop business continuity plans that would maintain the stable supply of key goods in the event of a crisis.

“The latest incident has reaffirmed the major impact that major industries such as steel and related industries could face from the damage caused by a natural disaster,” Jang said.

He said while Posco did all it could to prepare ahead of the typhoon, including early work suspension, more preparations should have been made.

Posco was forced to shut its steel plant on Sept. 6 after the plant was flooded due to the Typhoon Hinnamnor.

It was the first time in nearly half a century that plant was shut.

The report is not the final version as a government-civil joint investigation team is to continue to work on the issue until the end of the year.

A team of 10, including government officials and experts, including those specializing in steel production and disasters, conducted the investigation from September.

The team is led by Yonsei University professor Min Dong-joon, who specializes in material science and engineering.

Vice Minister of Trade, Industry and Energy Jang Young-jin announces an investigation result on the Posco steel plant shutdown in September, the first in 49 years. [YONHAP]

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]