SEOUL (Reuters) - South Korean steelmaker POSCO (005490.KS) is looking for strategic investors in the $1.45 billion stake it has in Australian’s iron ore project, Roy Hill, a spokeswoman said on Friday.
The company is seeking investors for the 2.5 percent stake out of the 12.5 percent it has, said POSCO’s Kim Ji-young, as the steelmaker is tightening its belt in response to the prolonged downturn in the steel industry.
POSCO, the world’s fourth-biggest steelmaker, has been looking to boost its access to iron ore and coal used to make steel, including taking a 15 percent stake in the $10 billion Roy Hill project early this year.
But the company in April sold a 2.5 percent stake in Roy Hill Holdings to China Steel Corporation (2002.TW) for 359.9 billion Korean won ($331.54 million), leaving it with a 12.5 percent stake.
The Roy Hill project is led by 70 percent stakeholder Hancock in Australia. POSCO, Japanese trading company Marubeni Corp (8002.T), South Korea’s STX Corp (011810.KS), and Taiwan’s China Steel Corp (2002.TW) are among the other stakeholders.
Shares in POSCO, backed by Warren Buffett’s Berkshire Hathaway (BRKa.N) (BRKb.N), were up 0.3 percent in a flat broader market .KS11 as of 0051 GMT on Friday. It has fallen nearly 10 percent this month, as brokerages downgraded its earnings outlook for the current quarter.
($1 = 1085.5500 Korean won)
Reporting by Hyunjoo Jin; Editing by Jeremy Laurence