POSCO Receives Dividends for the First Time in 10 Years from Australia Roy Hill Mine Investment

[Asia Economy Reporter Park So-yeon] POSCO will receive its first dividend 10 years after investing in the Roy Hill mine in Australia.

On the 24th, according to POSCO, the board of directors of Roy Hill Holdings resolved to pay dividends based on the company's improved financial soundness and solid profit realization.

This is the first dividend since the founding of Roy Hill Holdings. The total dividend amount is 475 million Australian dollars (approximately 403.6 billion KRW), of which POSCO will receive about 50 billion KRW next month, corresponding to its 12.5% stake.

Roy Hill Holdings is a corporation established to develop the Roy Hill mine located in the Pilbara region of northwestern Australia. The major shareholder is Hancock (70%), and POSCO (12.5%), Marubeni Corporation (15%), and China Steel (2.5%) formed a consortium to jointly invest.

The Roy Hill mine is the largest single mine in Australia, with iron ore reserves reaching 2.3 billion tons. The iron ore exported by Roy Hill Holdings amounts to 55 million tons annually, ranking it fifth in the world.

POSCO signed a cooperation agreement with Roy Hill Holdings in 2010 for mine development. At that time, iron ore prices were very unstable due to the oligopoly of raw materials by large suppliers, and POSCO decided to invest to secure a stable supply of iron ore.

A POSCO official explained, "The iron ore price, which was $130?140 per ton at the beginning of the investment, plummeted to around $56 in 2015, raising concerns about the investment. However, we prioritized business stabilization and focused on mine development and operational efficiency."

POSCO began procuring 6 million tons of iron ore in 2016, just two years after mining started, and currently receives 15 million tons annually, accounting for 26% of its yearly demand.

The management performance of Roy Hill Holdings has rapidly improved since commercial production began in 2017, with operating profit reaching 3.2 billion Australian dollars as of the accounting period ending in June this year.

Accordingly, POSCO's equity-method profit increased from around 12 billion KRW in 2016, the early production stage, to 150 billion KRW last year.

In August this year, Roy Hill Holdings repaid the entire 6.2 billion dollar loan borrowed for mine development ahead of schedule, advancing the repayment deadline by over four years from the originally scheduled September 2024.

POSCO stated, "The large dividend from Roy Hill Holdings not only dispelled public concerns but also signifies that the business has entered its main track. Financial soundness has greatly improved, and dividends are expected to continue in the future."

Meanwhile, POSCO began overseas raw material development in 1971, before the Pohang Steelworks started operation in 1973, and since investing in the Mount Soli mine in Australia in 1981, it currently holds development rights for steelmaking raw materials in 23 locations worldwide.

This content was produced with the assistance of AI translation services.