South Korea's leading steelmaker POSCO said Thursday it signed a preliminary deal with a trading unit of Japan's Toyota Group to cooperate on a magnesium and other rare metal-related business.
POSCO and Toyota Tsusho Corp. will jointly invest in the magnesium-refining business, and also work together to boost the use of magnesium, the Korean company said.
Under the deal, POSCO will also supply magnesium ingot to Toyota Motors Corp. and its affiliates.
POSCO is building a magnesium refinery plant in South Korea with an annual capacity of 10,000 tons, with construction scheduled to be completed by June next year.
POSCO plans to boost the plant's output to 100,000 tons by 2018, it said.
Last week, POSCO began to build a separate plant in South Korea that will produce 10,000 tons of magnesium sheets to be used for production of automotive parts.
Currently, magnesium is used mainly in manufacturing hard cases for mobile devices such as mobile phones and laptop computers. as well as in automotive products.
Global production of magnesium is estimated at some 850,000 tons per year, most of which comes from China.