Oleg Deripaska signs a memorandum of understanding with South Korean giant steelmaker

The pact was signed by Oleg Deripaska, Chairman of the Supervisory Board of Basic Element and CEO of En+ Group and Chung Joon-yang, CEO and Chairman of POSCO.

'As the first step of cooperation, En+ Group and POSCO will consider a joint development of a steel mini-mill project in the Irkutsk region,' said a statement. 

'The steel mini-mill will focus on the production of long steel products, and will have an estimated capacity of up to 260,000 tonnes per year. It is expected to be the first producer of such products in the region, and will allow the companies to benefit from the growing demand for long steel products, which are mainly used for the construction industry in Eastern Siberia'.

En+ Group and POSCO 'also agreed to cooperate in relation to the Lenskaya Power Plant project in the Irkutsk region and joint exploration and drilling of the Kupsky gas deposit, which aims to supply gas to the Lenskaya Power Plant. 

'The installed capacity of the Lenskaya Power Plant is expected to be 1.26GW. Among the prospective consumers of its electricity are the new mining and metals projects in Eastern Siberia, the Eastern Siberia-Pacific Ocean oil pipeline, as well as the Baikal-Amur Mainline Railway.

A Research and Design Centre for the implementation of POSCO's 'green building solutions' will be established in Basic Element construction factories to find a business opportunity for green building projects and sustainable urban development in Russia, it was reported.

'We are pleased to strengthen our ties with POSCO, as we see South Korea as a key strategic partner in developing mining, metals and energy projects in the East of Russia,' said Mr Deripaska. 'We see POSCO a long-standing partner and hope that this cooperation will bring mutual benefit to the companies and is yet another big step in Russia-Korea cooperation.'

Chung Joon-yang, CEO and Chairman of POSCO, said: 'Close cooperation with Basic Element and En+ will not only maximize both companies' merits, but also provide good opportunities to POSCO in advancing to Eastern Siberia region, as business fields between two companies are highly correlated'.