# South Korea Defied the Gods to Build its Steel Colossus

## Метаданные

- **Канал:** Asianometry
- **YouTube:** https://www.youtube.com/watch?v=8fbhE0F-rjA
- **Дата:** 23.04.2026
- **Длительность:** 22:34
- **Просмотры:** 88,120

## Описание

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## Содержание

### [0:00](https://www.youtube.com/watch?v=8fbhE0F-rjA) Segment 1 (00:00 - 05:00)

South Korean President Park  Chung-hee believed that steel   is national power. He wanted a huge  integrated steel mill in South Korea. But the Western powers were skeptical. South Korea   was extremely poor, without substantial  iron reserves. Their workers, uneducated. For South Korea to go straight to what  was then the most capital-intensive   heavy industry was to defy economic  orthodoxy. Too soon. Too inefficient. But Park Chung-hee believed Korea needed  steel. So he pushed his country to build   one of the world's most advanced steel companies. In today's video, we go back to  the world of steel and recount   one of South Korea's most iconic companies: POSCO. ## Beginnings When Park Chung-hee took power in 1961,  South Korea was in a perilous state. The country was still recovering from  the devastation of the Korean War. Its   security heavily depended on aid from its ally,   the United States. But this relationship  was testy even in the best of times. And the post-war South Korean economy was  poor - struggling from trade deficits,   low foreign exchange reserves, rampant  inflation, and stalling growth.    The per capita income was about $80 and the  country can barely keep itself from starving. To solve this, Park imagined a massive  industrialization effort to make the South Korean   economy "self-sustaining". This effort needed  steel. Modern steel made right in South Korea. However, many of the steel mills built  during Korea’s colonial era were located   in North Korea. Prior to the Korean War,  president Syngman Rhee tried to build a   South Korean steel industry, but failed due to  a lack of capital and government coordination. And then there was the Korean War itself, which  devastated the country's industrial areas. The   Bank of Korea calculated that 75% of the country's  pre-war capacity in steel and iron was destroyed. Park Chung-hee sought to rebuild  all that capacity and more.    He was convinced that South Korea cannot  forge its other key industries - automotive,   shipbuilding, heavy industry  - without first making steel. Thus, he made iron and steel-making the focus   of his administration’s first and  second five-year development plans. ## Expertise and Capital To build a massive integrated steel mill, the  South Koreans needed expertise and lots of cash. Park Chung-hee arm-twisted  four chaebol to form Korea   Integrated Steel Mill Inc and sought partners. They first approached West Germany. An  agreement was signed for a feasibility   study in March 1962, but fell through  due to a lack of financial resources. Korea Integrated tried again  in late 1962 - agreeing with   an American investor consortium for a  steel mill in Ulsan with capacity of   about 250,000 to 300,000 tons per year. The  issue again however was getting the money. Park's administration took control of  the central bank and financial sector   to funnel domestic savings towards his  projects. But the South Korean people   were very poor back then. There  was not enough domestic savings. So if they wanted to get enough money  to build an integrated steel plant,   it had to come from abroad. ## KISA The South Korean government first turned to the Americans for economic aid. But  this turned out to be tricky. Both the US Agency for International  Development and the US Import-Export   Bank declined. The US Government was  urging Park towards democratization   and civilian rule. Issuing foreign aid  felt like sending the wrong message. USAID also remarked that the South  Korean government should be focusing   on other sectors like energy, transportation,  machinery and communication rather than steel. But Park Chung-hee single-mindedly  pursued steel. After the Korea   Integrated Steel failure, he deployed  personal diplomacy for his next effort. During a US trip in 1965 to meet  American president Lyndon Johnson,   he also traveled to Pittsburgh to visit  Jones & Laughlin Steel Corporation's   Aliquippa plant. Reporters reported  him watching the steelworks and saying: > "This is the most impressive...   all this fine modern equipment. " During this trip, Park met with  Fred Foy, the chairman of Koppers,   to discuss cooperation. Koppers was then  one of the world's leading steel mill   engineering firms. Foy was receptive,  as was the World Bank at the time.

### [5:00](https://www.youtube.com/watch?v=8fbhE0F-rjA&t=300s) Segment 2 (05:00 - 10:00)

Thus formed in December 1966, a  consortium of players from the   US and Europe called Korea International  Steel Associates or KISA. Their goal was   to raise the money for and build  a modern steel mill in Korea. ## KISA Stalls KISA's job was to build a steel mill.   And Park was not screwing around. He announced this steel mill during his   presidential campaign in 1967. When  progress stalled for a few months,   Park replaced his deputy Prime Minister and  the head of his Economic Planning Board. The new Board then negotiated a contract  with KISA, coming to a tentative agreement   in April 1967 where KISA would raise  $130 million from both foreign and   domestic sources to fund a 600,000  ton capacity integrated steel mill. Meanwhile, Park Chung-hee began looking at  potential Korean partners to lead the steel   mill build. By the summer of 1967, one  company emerged as the leader to do it:   Korea Tungsten Mining, led by one of  South Korea's rising stars, TJ Park. ## TJ Park Tae-Joon - I shall refer to him as TJ (박태준)  because “Park Park Park” - was born in 1927. As a child, he went to Japan with his  father for work. He then studied business   at Waseda University before returning  to Korea upon the end of World War II. He then joined the military where he fought  with honor in the Korean War. TJ first met Park   Chung-hee at the military academy when the former  was a cadet and the latter, a company commander. The elder Park took a liking to the cadet and  respected his intelligence. Also trusted him.    TJ did not participate in the 1961 military coup,   supposedly because if the coup were to fail, then  TJ was to look after Park Chung-hee's family. After the coup succeeded, TJ  served as Park Chung-hee's chief   secretary for three years. He then  declined to return to the military,   and in 1964 was sent by his government to Japan  to build up business contacts within industry. He returned to South Korea a few  years later and was put in charge   of a state-owned enterprise called  the Korea Tungsten Mining Company. The company controlled Sangdong Mine  - one of the world's largest tungsten   mines - and was one of the few sources  of foreign currency for the country but   had fallen in hard times. With effort,  he brought them back into the black. ## Pohang Park Chung-hee ordered TJ  to start preparations for   the construction of KISA’s integrated steel mill. First things first. Where to put it? They  spent a year evaluating five different sites   including Ulsan. In the end, they chose a sleepy  fishing town with about 50,000 residents: Pohang. Ulsan was the original front-runner, but  their own growing industry meant they   no longer had available space. Pohang  still had lots of open land and fresh   water as well as a deep-water harbor  to receive iron ore and coking coal. It was also far enough from North Korea to  not be immediately threatened by artillery.    And far enough from Seoul to diversify  away from the mega-city. Local officials   emphasized the mill's impact on the  then-impoverished Korean east coast. Thus in April 1968, the Pohang Iron  and Steel company was founded as a   private entity with 300 million  won from the government and 100   million from Korea Tungsten. Almost  immediately, they called it POSCO. ## KISA Falls Apart But meanwhile, KISA was in trouble. A seven-member, cross-cultural consortium  was always going to be unwieldy,   but when the Americans began to waver on the  issue the West Germans and British did too.    Neither government opted to  loan money towards the project. At the heart of the issue were divergent  views between the World Bank and the South   Korean government about the plant’s  size. The Koreans wanted a very large   steel-making plant capable of someday  producing 1-2 million tons per year. The World Bank felt that was too much.   They did a feasibility study in 1966   that asserted that the largest steel mill that  the South Koreans can economically support was   just 500,000 tons. 2 million tons of capacity  threatened to tip over the global steel market. Finally in November 1968, the World  Bank officially declined a loan for   KISA's steel mill. They recommended that  the country pursue light industry instead.    A steel mill was premature and not economically  feasible. KISA dissolved a few months later.

### [10:00](https://www.youtube.com/watch?v=8fbhE0F-rjA&t=600s) Segment 3 (10:00 - 15:00)

By then, the South Korean economy was  starting to gather steam. Thanks to   several major construction projects, iron  and steel consumption was growing rapidly   and well ahead of projections  - 15% year over year in 1967. Without an integrated steel mill  that can turn iron ore into pig iron,   and then pig iron into finished steel, South  Korea relied on small, privately-owned electric   arc furnaces that melted down scrap steel. At  about 10,000 tons each, these mills lacked scale. Whatever shortfall had to be fulfilled with  imports. In 1965, South Korea was only 61. 3%   self-sufficient in steel. Two years later  in 1967, that ratio had worsened to 58. 4%. ## Japan With the West proving unreliable,  Park Chung-hee turned eastward. The United States government had long wanted their  allies Japan and South Korea to make peace and   normalize relations. It would help strengthen each  other and shore up anti-Communist forces in Asia. The growing Japanese economy also  sought access to new markets,   and the United States was not open to  granting further access. The American   diplomats positioned normalization as a way for  Japan to develop a geographically close market. This was never quite possible while  Syngman Rhee - a former Korean   independence activist - was in charge.   The historical wounds left behind by   the Japanese occupation were too fresh.   Anti-Japanese sentiment, very strong. Park Chung-hee was a different man - been educated   in Japanese institutions and trained  in their military. More importantly,   he was pragmatic and ready to move on if that  meant economic opportunities for his country. Soon after taking power, Park Chung-hee entered  normalization talks with Japan. And in 1965,   they signed a treaty. As part of the  reparations, the Japanese prepared some   $500 million in grants and long-term loans  to settle property and claims issues. ## Turning to Japan When KISA began to fall apart in  mid-1969, Park thought to use some   of the Japanese reparations funds to build  his long-desired integrated steel mill. This was not as easy as it might seem.   The agreements were already signed.    The Japanese government initially declined  to join KISA - generally agreeing with the   westerners about the project's infeasibility. To secure their agreement, Park Chung-hee  pursued a two-track approach. First,   direct government to government  negotiations - which emphasized   the value of a stronger South Korea as a  deterrence against Communist aggression. Meanwhile, TJ leveraged own personal  ties to Japanese industry. Japan's   three largest steelmakers quickly got on  board. The main issue was the Japanese   government - most of all its powerful Ministry  of International Trade and Industry, MITI. TJ met with MITI's minister Masayoshi  Ohira, a future prime minister,   and pressed the strategic importance of steel -  evoking the history of Japan's own steel industry. Including how Japan decided to build the  massive Yawata Steel Works in the late   1800s without concern to economic viability. It  was simply a question of strategic necessity. In August 1969, Korea's deputy  prime minster announced that   the Japanese changed their minds and  were ready to back the steel project. Yes, it was in part due to Park Chung-hee's  determination and TJ's fervent lobbying.    But it was also just smart business.   KISA's collapse in early 1969 gave   Japan the opportunity to lead the project  without American or European interference. And the home Japanese steel market  was already oversupplied - with   social repercussions regarding steel pollution  issues. Exports to Korea can maintain sales of   steel-making equipment without further  exacerbating the domestic situation. This in part explains why the Japanese  steel companies were so in favor.    The Koreans played on this, with  one official quoted as saying: > If you help us build a steel mill...    your exports are guaranteed  and you can sell [machinery] And lastly, the Japanese government saw  Park Chung-hee's determination to build   his integrated steel mill - plus the country's  skyrocketing steel demand - and realized that   if they passed, then someone else (maybe  zee Germans) would eventually step up. ## Negotiations In November 1969, the two began  negotiating on the cooperation details.

### [15:00](https://www.youtube.com/watch?v=8fbhE0F-rjA&t=900s) Segment 4 (15:00 - 20:00)

South Korea had earlier submitted a  project proposal for a 1 million ton   capacity integrated steel mill along with  cost estimates and requests for technology. Japan opened negotiations with a 64-page  counter-proposal. They budgeted the mill to   cost 25% more and require a year longer  than what was in the Korean estimate. They also declined Korea's request  to transfer an advanced steel milling   technology called "continuous casting".   This game-changing technology lets a mill   cast molten steel directly into finished  shapes like sheets, wires, and rods. Otherwise, the molten steel must be  first cast into intermediate shapes like   ingots or billets before reheating  to produce the final shape - an   energy-intensive process. The Japanese  offered POSCO this older technology. From November 19th to 21st, 1969, the two sides  clashed. South Korea demanding the continuous   casting technology as well as an accelerated  construction schedule. The Japanese sticking   to their conservative assessments. The  arguments went late into the night. Finally on the 21st, the two sides reached a  compromise. The South Koreans agreed to Japan's   delayed timeline; A middle number budget of $123  million between Korea's $100 million and Japan's   $131 million estimates; And the older slabbing  technology for the main steel line. However,   Japan did concede to include a  smaller continuous casting unit. The deal was signed in December 1969 between the  South Koreans and Japan's Big Three steelmakers.    Construction would begin in April 1970  with anticipated completion in July 1973. As work began, TJ made clear the enormity of  their task. In June 1968 as preparatory work   began on track and water infrastructure in  Pohang, he gave a speech to his construction   staff. A commonly cited quote - cleaned  up but probably real - has him saying: > "This steel mill is being built with the  Korea–Japan claims settlement funds—the   price paid in the blood of our ancestors. If we  fail, it will be an unforgivable sin in history. " > "In that case, we should all march  out of the construction site office,   turn right, and throw ourselves into Yeongil Bay. " ## Building POSCO could not have existed  without nation-state resources. Like as in Japan, the South Korean central  government built out POSCO's infrastructure.    The Pohang local government evicted  residents' land for the site. A special   law was enacted so that energy and water can  be provided to POSCO at discounted prices. Despite that, TJ tried to run POSCO with as much  autonomy as possible. And being the president's   friend, he got that. But Park Chung-hee  nevertheless remained deeply involved,   visiting the Phase 1 site 13 times  during the build between 1970 and 1973. POSCO substantially leaned on the Japanese  for Phase 1. The Korean engineers were   asked to supervise and learn. But TJ did  make efforts to find separate sources of   coke and iron for POSCO - separate  from the Japanese trading companies. TJ also exercised some financial cunning by  having the steel mill built "backwards". Usually,   steel mills are built "forwards" - so from  iron-making to casting to rolling into   finished product. But that means the mill doesn't  generate revenue until the whole thing is done. POSCO was in need of immediate income. So  TJ asked to build the Phase 1 facility the   opposite way - from rolling to iron-making - so  that POSCO can import semi-processed steel slab,   and use that to make finished products to sell. Workers pushed through brutal sandy wind  conditions. They worked so hard that they were   too tired to go back to their quarters to sleep  and slept in the offices or on the roadsides.    When the initial foundation fell behind  schedule, TJ mobilized massive resources   to correctly but quickly pour tens of  thousands of tons of concrete to catch up. Add in an unexpected shipbuilding boom that  caused demand for plate steel to skyrocket.    And the result was POSCO turning  profits in its second full year,   1970. Far ahead of expectation. ## Student to Master The rest of the Phase 1 build was  completed on time in July 1973.

### [20:00](https://www.youtube.com/watch?v=8fbhE0F-rjA&t=1200s) Segment 5 (20:00 - 22:00)

The three years it took outclasses the  usual 4-9 years in other countries. By then, Park Chung-hee's Heavy  and Chemical Industries drive   was in full effect - a powerful  thrust to build up the country's   military-industrial capacity  to defend against North Korea. Steel would be at the heart of all this.   So President Park called to raise South   Korean steel capacity from 1 million  tons in 1973 to 10 million by 1980. POSCO thus embarked on a massive expansion that  added almost 6 million tons of steel over five   years, phases 1 to 4. By then, the Koreans had  been trained and taken over for the Japanese. Throughout this, TJ navigated delicate  geopolitics, domestic politics -   Park Chung-hee was assassinated in 1979 - and  a substantial steel market glut in the mid-70s. After Phase 3 was completed, TJ again went to the   aging president - a few hours before the  latter's assassination apparently - and   secured authorization to build a second  mill next to Pohang - Gwangyang Steel. Begun in 1982, the Gwangyang Steel mill  adopted all the latest technologies - like   the basic oxygen furnace, continuous  casting, and computer control. And by laying these units out in an innovative  single line, Gwangyang's steel costs were 60%   that of the average American steel mill. Good  enough to start selling into the Japanese   market and compete with the Japanese steel  giants. The student had now become the master. ## Conclusion Today, POSCO is one of the world's most  efficient and advanced steel companies. Measured by pure steel production in 2024,   the company is eighth place. One of the  few non-mainland Chinese producers to   rank in the top ten. And they rank  very highly in terms of efficiency. They also have a large geographical footprint.   Particularly the Mainland Chinese market,   which they entered in the 1990s  with great benefit. China to this   day remains one of their top export destinations. Few steel companies have an origin story  so deeply intertwined with their country's   rise from poverty. South Korea went  to the limit to get the chance to   build their integrated steel mill. And  the men and women of POSCO responded.

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*Источник: https://ekstraktznaniy.ru/video/51191*