South Korean steelmaker POSCO will build an industrial gas production facility with a capacity of 250,000 tons in Pohang, North Gyeongsang Province, which will provide high-purity oxygen and nitrogen to its battery materials subsidiary POSCO Future M Co.

POSCO announced Tuesday that it broke ground on a 250,000 ton per year industrial gas production facility at its secondary battery specialty complex in Yeongil Bay General Industrial Complex.

POSCO plans to invest about 100 billion won ($76.2 million) in a site of about 16,500 square meters for facility expansion.

The new facility will include an air separation unit (ASU) for separating and refining oxygen and nitrogen from the air, along with a large storage tank capable of storing 2,000 tons of liquid oxygen.

The installation schedule plans to first set up the storage tank by the latter half of next year and complete the ASU by the latter half of 2025.

The project marks POSCO’s first venture into establishing an industrial gas production plant outside of its steel mills. Previously, POSCO has operated a total of 22 oxygen factories, the largest scale in Korea, within its Pohang and Gwangyang steel mills.

The facility expansion aligns with POSCO’s strategic connections with major customers such as POSCO Future M, which is operating the cathode material factory within the Pohang secondary battery specialized complex.

POSCO produces about 17 million tons of industrial gas annually, utilizing 16 million tons for its steelmaking processes and selling the remaining portion externally.

After the completion of the new facility, POSCO will increase the proportion of gas sold externally.

Oxygen and nitrogen are essential not only for steel production but also for various other industries like semiconductors, shipbuilding, chemicals, and automobiles.

About 80 percent of the gas market demand comes from the semiconductor and secondary battery material sectors, which are considered to have substantial growth potential.

The domestic industrial gas market has been dominantly occupied by foreign companies and private equity fund-owned enterprises, holding over 90 percent.

By Cho Yun-hee and Minu Kim

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