POSCO International (047050.KS), which is accelerating its efforts to expand its global critical mineral supply chain, is entering Mongolia's resource development business. The move is interpreted as a strategy to strengthen strategic cooperation from the local development stage with Mongolia, a resource-rich nation with abundant reserves of copper, rare earths and lithium, and to broaden its procurement of minerals essential to advanced industries.
According to industry sources Wednesday, POSCO International working-level officials visited Mongolia the previous day and signed a memorandum of understanding (MOU) with Erdenes Mongol, a local state-owned mining company, to develop critical mineral production and technology complexes. The two companies have reportedly been discussing joint projects and cooperation measures that could be carried out in Mongolia since early this year.
Through this agreement, POSCO International is expected to participate in the mining development projects held by Erdenes Mongol and to fully advance into the critical mineral supply chain. Erdenes Mongol holds 67 mining rights and 17 exploration rights covering copper, coal and rare earths, among others, and operates a total of eight mines locally. It is also leading the critical mineral exploration projects pursued by the Mongolian government.
Mongolia ranks second and fourth in the world in copper and coal reserves, respectively, and is counted among the world's top 10 resource-rich nations, with abundant critical minerals such as rare earths and molybdenum. In particular, as the global supply chain is being reshaped around the United States and China, Mongolia is drawing attention as a non-China mineral supplier. However, due to chronic problems such as a lack of smelting infrastructure and processing technology, it has sought cooperation with foreign companies that possess advanced technology.
POSCO International is accelerating its drive to secure a foothold in the critical mineral supply chain by actively participating in overseas mining development. It is currently building a stable supply system by making equity investments in mines for materials such as graphite in various countries including Tanzania, or by signing long-term offtake agreements for the output. This agreement with Erdenes Mongol is also interpreted as a strategic decision to expand the critical mineral supply chain into Central Asia.
POSCO International is broadening the scope of its cooperation, including pursuing an energy infrastructure project in Mongolia. In September last year, POSCO International signed an agreement with the city of Ulaanbaatar, Mongolia, for a heating supply project utilizing wastewater heat, and is currently conducting a joint feasibility study. After verifying economic feasibility and technological capability, it is expected to launch the main project as early as the second half of this year under a build-operate-transfer arrangement.
