Posco seeking investments in Ukrainian iron ore mines

Posco, Asia’s third-biggest steelmaker, announced today that it signed a letter of intent to invest in a Ukrainian iron ore mine. This step is expected to boost the company’s self-sufficiency in raw materials from 18% to 30%. Posco was asked today by the Korea Exchange to clarify reports that it wants to buy an iron ore mine, a steel plant and shipyard in Ukraine. Posco has until 6 pm local time today to respond. Eugene Cherviachenko: Among likely acquisition candidates for Posco, we see MMK Illicha (MMKI: BUY) or Zaporizhstal (ZPST: BUY). These two steel producers jointly own a license to develop an iron ore deposit in Ukraine. Another possibility is that Posco is in talks with Ferrexpo (FXPO: HOLD) or the Donetskstal group, which also have iron ore licenses.