1. POSCO’s Relations with Australia in Mineral Resources
The 26th Joint Conference of the KABC/AKBC Business Council
POSCO’s Relations with Australia in Mineral Resources
Kwon, Young-Tae Senior Vice President POSCO
November 4, 2004

2. Contents  POSCO- Company Overview
 Expansion Program and Raw Materials Requirements
 POSCO’s Investment in Overseas Mineral Resources
 POSCO’s Procurement Strategies
 Cooperation in Purchasing Australian Raw Materials

3. Crude Steel Production
 POSCO – Company Overview
Financial Results 5 10 15 20 25 30
(m ton)
Crude Steel Production
Revenue
12.3b$
6.0b$
3.0b$
GY phase #4 Oct. ’92
20.8mt
PH phase #4
May ’83 9.1mt
1.03mt
(Jul ’73)
28.9M ton (’03.12.E)
 Performance results (FY2003)
 Revenue : 14.4 trillion KRW (12.3 b U$)
 Net income after tax : 1.98 trillion KRW (1.7 b U$)  Crude Steel Production : 28.9Mton
 Employees : 19,177
Founded in April, ‘68
9.0b$
GY #5 BF
Apr. ’00
28.0mt

4. POSCO`s Global Operations (as of Sept. 30 of 2004)
Dailian CFM
Tianjin C.C l
POSCAN
Greenhills J/V
POSAM
UPI
POSEC Hawaii
KOBRASCO
PIO,
POSMETAL
Zhangjiagang S.S
Shunde C.S
Guangzhou-Jindo
POA, POSINVEST
POSA MT.Thorley J/V
POSVINA,VPS,VINAPIPE,
POSLILAMA, IBC
SUS, POS-Thai
POSCHROME
Assan Hyundai
POS-Hyundai
Myanmar-POSCO
POS-MI
POSMMIT
POSMAC J/V
Qingdao S.S
POS-Qingdao
Suzhou P.C
POSA Foxleigh J/V
(No., million U$)
Total
By investor party
By purpose
POSCO
POSTEEL
POSCO E&C
Others
R. M
Production
Sales office
Subsidiaries 49 29 11 5 4 6 25 18
Total Investment
4,015
3,586
153
272
350
2,881
783
※ China : 23 subsidiaries (U$2,361millon)

5. POSCO`s Rating by WSD
Among the 22 world-class steelmakers, POSCO ranked No.1
* The below factors are from original 20 ones
Factor
POSCO
Arcelor
NSC
Baosteel
Weight
Annual Steel Shipments
m t 29 46 26 11
1. Cash operating cost
11. Expanding capacity
12. Iron ore/coal mines
14. Location to procure raw materials
15. Alliances, M&A and JVs
20. Threat from nearby competitors
11% 4% 9 4 3 8 6 1 2 10 7
Weighted Average
100%
8.17
5.61
6.21
7.71
Ranking 20 13
* Source : WSD( `04.9)
1= Least favorable, 10= Most favorable

6.  POSCO’s Expansion Program & Raw Materials Requirements
Domestic
Overseas
 Operate a new Finex plant from  Continue to revamp and rationalize existing facilities  Optimize and streamline production flow
 Maximize value added products Improve the sales portion of higher margin products
Expand overseas down-stream production base
: China and Southeast Asia
- Closely cooperate with foreign governments and companies
Invest in raw materials and up-stream process in resources-rich countries
: India, Brazil and Australia

7. Domestic Expansion Program of POSCO
(Million tons)
Year
2004
2005
2006
2008
2010
Crude Steel
30.0
30.9
31.0
34.0
34.1
Carbon
28.0
28.8
28.9
31.8
31.9
STS
2.0
2.1
2.2
Molten Iron
27.4
26.8
27.5
31.1

8. ※ Raw Materials Purchase Records
(Million tons)
Year
1983
1992
2000
2003
Iron Ore
Aus.
4.5
15.2
22.6
26.8 %
39.1
50.7
57.5
63.1
Total
11.5
30.0
39.3
42.5
Met. Coal
3.3
9.2
10.6
12.4
48.5
57.1
52.0
56.1
6.8
16.1
20.4
22.1

9. Mid-term Raw Materials Requirements
(Million tons)
Year
2004
2005
2006
2008
2010
Iron Ore
Aus.
26.1
26.4
26.7
31.1
31.4 %
61.1
62.4
62.8
65.2
65.8
Total
42.7
42.3
42.5
47.7
Met. Coal
12.2
12.3
12.5
14.4
14.5
55.2
55.9
56.6
57.8
58.2
22.1
22.0
24.9

10.  POSCO’s Investment in Overseas Mineral Resources
Iron ore/coal purchasing from its own developed mines: 14%/2004 → 30%/2010
Raw Material
Project
Country
Share Holder
Start-up
Capacity (2004)
Iron Ore
Pos-MAC
Australia
POSCO 20% BHPB 80%
Oct, 2003
23 m t
KOBRASCO
Brazil
POSCO 50% CVRD 50%
Oct, 1998
4.0 m t
Met. Coal
Greenhills
Canada
POSCO 20%
EVCC 80%
Sept,1983
4.4 m t
MT. Thorley
POSCO 20% Rio Tinto 80%
Jan, 1981
Foxleigh
Others 80%
Mar, 2000
4.3 m t

11.  POSCO’s Procurement Strategies
Market Environments
Key Strategies
Strengthening SCM activities
 Require strong partnership with suppliers
 Require active investments in new raw materials development projects
Participating in new projects
Developing new technology
to utilize low grade R. M
 Intensifying the competition to secure raw materials
 Transportation cost is to be a critical factor for cost competitiveness
Securing transport
competitiveness

12. Comparative Advantages Comparative Disadvantages
 Cooperation in Purchasing Australian Raw Materials
Advantages & Disadvantages of Australian Raw Materials
Comparative Advantages
Comparative Disadvantages
Rich deposits and reserves
Good quality management
Geographical proximity
Well established infrastructures
Stable labor management
POSCO’s high dependency - Iron Ore: 61%, Met. Coal: 55%
Oligopoly by region and suppliers
Rail and loading port congestions
Time lag between demand growth and infrastructures/mines expansions
Gradual depletion of high quality raw materials

13. Requests to Australian Mineral Resources Industry
Keeping expansion plans of mines, rails and ports on schedule
Continuous efforts for stable labor management
Encouraging suppliers to expand the capacity
Maximizing existing ports utilization through better management

14. Thank You