Hyundai Steel and POSCO press ahead with $5.8 billion low-carbon steel mill in Louisiana

On a stretch of riverfront land outside Donaldsonville, Louisiana—where sugarcane fields give way to refineries and chemical plants—two of South Korea’s biggest industrial names plan to build a project that could reshape both the local skyline and a critical global supply chain.

Hyundai Steel Co. and POSCO Holdings Inc. are moving ahead with a $5.8 billion steel mill in Ascension Parish that state officials say will be among the largest industrial investments in Louisiana’s history. The plant is designed to feed Hyundai Motor Group’s expanding U.S. auto and electric vehicle business with steel made in America, using a production process the companies say will emit far less carbon than a traditional blast furnace.

Financing and ownership

Hyundai Steel disclosed on Jan. 26 that its U.S. affiliate, Hyundai-POSCO Louisiana LLC, approved a capital increase of about $2.9 billion to finance construction of the facility. The rest of the project cost is expected to be covered by borrowing, according to the filing in South Korea’s regulatory system.

The mill will anchor about 1,700 acres inside the RiverPlex MegaPark on the Mississippi River, roughly 30 miles south of Baton Rouge. State economic development officials say the plant will eventually produce about 2.7 million metric tons of steel a year, mostly high-grade hot-rolled and cold-rolled sheet for automakers.

“This nearly $6 billion investment speaks volumes about Louisiana’s workforce and infrastructure,” Gov. Jeff Landry said when the project was announced at the White House last March. He called it evidence that “manufacturing is roaring back” in the state.

Under the ownership structure confirmed in late 2025 and now being implemented:

• Hyundai Steel’s U.S. subsidiary will hold 50% of the joint venture.
• POS-Louisiana Inc., a special-purpose unit of POSCO, will own 20%.
• Hyundai Motor America and Kia America will each hold 15%, directly tying the plant to their North American assembly networks.

POSCO, historically Hyundai Steel’s main rival in South Korea, confirmed in a December filing that it would invest about $582 million for its 20% stake. The move gives POSCO a primary steelmaking foothold in the United States after years of operating downstream processing and a separate plant in Mexico.

A “ultra-low-carbon” design

The companies and state officials describe the facility as an “ultra-low-carbon” steel mill built around electric arc furnaces and direct-reduced iron (DRI). Unlike conventional integrated mills that use coke-fired blast furnaces, the DRI-EAF route relies on iron ore reduced with natural gas or hydrogen and melted in electric furnaces.

Louisiana Economic Development has said the design is expected to cut carbon dioxide emissions by about 70% per ton of steel compared with traditional methods.

Hyundai Steel has said the plant will supply “next-generation automotive steel” to Hyundai and Kia factories in Alabama and Georgia, including the company’s electric vehicle “Metaplant” under construction near Savannah. The company also aims to sell into the broader U.S. market for high-strength automotive sheet, long a domain of domestic producers and Japanese and European exporters.

Tariffs, trade policy and supply-chain strategy

The decision to pour billions of dollars into a U.S. mill reflects a convergence of trade, climate and industrial policy.

The United States has imposed 25% tariffs on most imported steel under Section 232 of the Trade Expansion Act of 1962, a measure first implemented in 2018 and maintained in various forms since. South Korean producers initially operated under a quota system that capped shipments; more recently they have faced renewed tariff risk as the U.S. government has revisited steel import rules.

President Donald Trump, who joined Landry and Hyundai executives at the March 24, 2025, announcement, directly linked the investment to his tariff strategy.

“This is a clear demonstration that tariffs very strongly work,” Trump said at the White House event.

Hyundai and POSCO have not publicly attributed the decision solely to tariffs, instead emphasizing what they call localization of supply chains and greater resilience for their auto businesses. But Korean business media have described the Louisiana venture as part of a “K-Steel alliance” aimed at limiting exposure to U.S. trade barriers by producing inside the tariff wall.

Incentives, jobs and workforce training

For Louisiana, the project is the payoff from years of trying to land a marquee industrial tenant for the sprawling RiverPlex site, one of the largest undeveloped deep-water properties on the Mississippi.

To secure the mill, the state committed a $100 million performance-based grant to support infrastructure including roads, rail spurs, power lines, pipelines and a dock, and made the company eligible for payroll tax rebates under Louisiana’s Quality Jobs program.

State officials estimate the plant will create:

• More than 1,300 direct jobs with average annual pay of about $95,000
• Roughly 4,100 indirect jobs in construction, services and suppliers

Hyundai and Louisiana’s workforce agency plan to work with River Parishes Community College and the Louisiana Community and Technical College System on training programs tailored to the plant’s technical needs.

“Made in America is good, but made in Louisiana is even better,” Sen. Bill Cassidy, R-La., said in a statement supporting the project. He called the mill “a major win for American manufacturing” and credited Trump and Landry for backing it.

Environmental and community scrutiny

The mill’s design and siting are drawing attention from environmental and community advocates.

The Mississippi River corridor between Baton Rouge and New Orleans hosts more than a hundred petrochemical plants, refineries and industrial facilities. Activists and some researchers have described parts of the region as “Cancer Alley” because of concerns about cancer and respiratory illness linked to air pollution.

While the DRI-EAF process burns less coal and emits less carbon dioxide than blast furnaces, it still requires large amounts of electricity, natural gas and shipping, and is expected to be a significant new industrial source of air and water emissions.

Hyundai and state officials stress that the plant will be far cleaner, on a per-ton basis, than older steelmaking routes and aligned with global climate goals.

“The U.S. plant will drive local economic growth and job creation, while enabling Hyundai Steel to supply steel for Hyundai and Kia’s key models and expand sales to other U.S. automakers,” Hyundai Steel Chief Executive Gang Hyun Seo said when the project was unveiled. The company has said it intends over time to increase the share of low-carbon energy used in the process.

The Louisiana Department of Environmental Quality and the U.S. Army Corps of Engineers are expected to handle major air, water and wetlands permits, including approvals for the new deep-water dock. Detailed permit applications and conditions have not yet been made public.

Beyond regulatory approvals, the project raises questions about who will benefit most from the new jobs and whether residents in nearby communities—many of them Black and low-income—will see gains that offset potential health risks. Economic development officials say a focus on local hiring and training is built into their plans, but hiring practices, unionization and safety standards will not be clear until construction ramps up.

A new competitor in automotive steel

Nationally, the plant will add a significant new competitor to the U.S. market for automotive steel, where companies such as Cleveland-Cliffs, Nucor and U.S. Steel have invested in their own lower-emission capacity and advanced high-strength grades.

With Hyundai and Kia as anchor customers, the joint venture will have a built-in market for much of its output and a platform to pitch lower-carbon steel to other automakers trying to shrink emissions from their supply chains.

Timeline

Construction on the Louisiana facility is expected to begin in the third quarter of 2026, with commercial operations targeted for 2029. Once fully ramped, state officials have said annual revenue from the mill could reach about $4.1 billion.

For Ascension Parish, the project offers the prospect of thousands of construction jobs, a surge in tax base and a new industrial identity beyond the petrochemical plants that dominate its riverfront. For Hyundai, POSCO and the broader auto industry, it is a bet that cleaner, localized steelmaking will be a strategic advantage in a world of volatile trade rules and tightening climate standards.

Whether residents along this stretch of the Mississippi view the towering furnaces and new river dock as a symbol of opportunity or one more industrial burden will depend on how those promises play out over the next decade, as the first coils of Louisiana-made steel roll off the line and into the frames of American-built cars.