Driving about an hour from downtown New Orleans, Louisiana, the landscape shifts from urban to vast sugarcane fields. As the road narrows, a large, cleared area emerges, previously occupied by sugarcane.
On September 4, a reporter visited the site where Hyundai Steel plans to invest $5.8 billion to build the 'HPLS Electric Arc Furnace Steel Mill.' Currently, the site is barren, making it hard to envision a steel mill.
However, by 2029, the scene will change dramatically. The HPLS Electric Arc Furnace Steel Mill, a joint venture between Hyundai Steel and POSCO, is expected to produce 2.7 million tons of steel annually. This facility will be the first electric arc-based integrated steel mill in the U.S. dedicated to automotive steel, combining direct reduction process (DRP) and electric arc furnace (EAF) technology to reduce carbon emissions by over 70% compared to traditional blast furnace methods.
The local community has high hopes for the project. Once operational, the steel mill is expected to create over 1,300 direct jobs and approximately 5,400 jobs in construction and related industries, bringing significant manufacturing employment to the Donaldsonville area.
Chung Eui-sun, Chairman of Hyundai Motor Group, emphasized at the groundbreaking ceremony in Donaldsonville, Louisiana, that the HPLS project is not just an investment in facilities but also an investment in the community and the future economy of Louisiana. He stated, "The steel produced here will support key U.S. industries, including next-generation mobility, AI data centers, and power facilities, playing a crucial role in strengthening America's manufacturing leadership."
Logistics Hub with Mississippi River and Railroads to Mitigate Trade Risks
The HPLS facility will be Hyundai Steel's first steel mill in the U.S., with a capacity of 2.7 million tons. Hyundai Steel will hold a 50% stake, while POSCO will have 20%, and Hyundai Motor and Kia will each invest 15%. Once production begins in 2029, the mill is expected to produce 1.8 million tons of automotive steel and 900,000 tons of general steel.
The facility will utilize a low-carbon process combining direct reduced iron (DRI) and electric arc technology to produce high-quality automotive steel, which will be supplied not only to Hyundai Motor Group but also to other automakers in the U.S.
The decision to locate the steel mill in Louisiana was largely influenced by its geographical advantages. The site is near the Mississippi River, which runs north to south through the U.S., and has a well-established railroad network, facilitating the transport of raw materials and finished products. The deep water also allows for the use of barges and large vessels, making inland transportation easier via rail.
Local production is expected to alleviate tariff burdens. By producing steel domestically through HPLS, the facility can avoid U.S. tariffs. The strong demand for steel in the U.S. is also seen as a competitive advantage, as the country imports about 20 million tons of steel annually, with HPLS expected to capture around 10 million tons of that demand.
Domestic Competitors, Global Allies: Hyundai Steel and POSCO Join Forces
This project is significant as it marks a collaboration between Hyundai Steel and POSCO, the top two steel companies in South Korea, which have traditionally competed in the domestic market. Together, they aim to target the low-carbon advanced steel market globally by combining their technologies and capital.
Chung In-hwa, Chairman of POSCO Group, noted, "While POSCO and Hyundai Steel are competitors in South Korea, we are both Korean companies on the global stage. Our goal is to cooperate in the global market to enhance the stature of our companies worldwide."
Both companies will also face the technical challenge of producing high-quality automotive steel while reducing carbon emissions through electric arc technology. Chung stated, "To produce the highest quality steel for automotive use from DRI and electric arc, we need POSCO's hydrogen reduction steelmaking technology and automotive steel technology. By collaborating with Hyundai Steel, we can become a company with the world's best competitiveness."
POSCO plans to accelerate investments in global growth markets, starting with the U.S., and aims to expand its overseas crude steel production capacity to 10 million tons by 2031. In April, it signed a joint investment agreement with India's JSW Steel for a 6 million ton integrated steel mill and is exploring options to double crude steel production capacity at an integrated steel mill in Indonesia with state investment firm Danantara.
* This article has been translated by AI.
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