POSCO Engineering & Construction Co., an affiliate of South Korea's top steelmaker POSCO, has signed a US$100 million deal to build a combined heat and power plant in Mexico, Korean media reported.
The company signed an agreement with Ener AB to install a 100-megawatt power plant in the municipality of Ocampo, Coahuila, Northern Mexico, to supply stable power to the Magnelec chemical plant nearby. POSCO E&C aims to complete the construction in 24 months from its commencement date.
Magnelec, located in the community of Laguna del Rey, in the west region of the state, is the largest sodium sulphate plant in the country, a chemical used in the production of detergents, glass, paper and auxiliary in the dyeing of colors for the textile industry.
The plant also produces magnesium sulphate, whose main application is as a vegetable nutrient, and magnesium oxide, which is used to make refractory materials, although it is also used as a flux in metallurgy, as well as in the manufacture of ceramics, paints and glass.
Ener AB is a joint venture between U.S.-based power firm AES Corp. and Mexican firm Grupo Bal. AES currently operates power generation facilities in 18 countries across the world and has kept up business ties with POSCO E&C since 2006.
Grupo Bal is one of Mexico’s largest conglomerates which run mining, trading and insurance businesses. The company’s mining division, Grupo Peñoles, is the Magnelec plant owner.