Altos Hornos de México (Ahmsa) and Korean steelmaker Pohang Iron and Steel (Posco) have signed a letter of intent to jointly evaluate mining and iron and steel projects, including a potential mining joint venture between the companies to supply iron ore to Posco. Posco will support an investigation into the possibility of Ahmsa developing a facility to supply the Mexican market with automotive standard quality steel, not currently produced in the country.

Pursuant to the letter of intent, by mid-year 2012, both parties will determine the elements required to establish a joint venture related to mining operations and will review and analyze a possible collaboration related to production of rolled steel.

Ahmsa is the major integrated iron and steel company in Mexico. It has two production facilities in Monclova, Coahuila, and it operates its own iron ore and coal mines. Posco is the world’s third-largest steel producer. It produces cold and hot rolled steel, including a wide variety of steel for automotive use.