South Korea's Hyundai Steel has officially commenced construction on a $5.8 billion electric arc furnace steel mill in Louisiana, USA, designed to produce hot-rolled and cold-rolled steel sheets primarily for the automotive sector. The company announced on Friday that the project is slated to reach commercial production by 2029.

The facility, which will boast an annual production capacity of 2.7 million tons, will be operated by Hyundai-POSCO Louisiana Steel LLC, a joint venture established by Hyundai Steel, POSCO, Hyundai Motor, and Kia. This ambitious project is anticipated to generate 5,400 jobs, with 1,300 of those being direct positions.

The new plant will supply automotive steel to Hyundai Motor's Alabama plant, Kia's Georgia production site, and the Hyundai Motor Group Metaplant America, also located in Georgia, in addition to serving other U.S. automakers. This steel mill forms a key component of Hyundai Motor Group's commitment to invest a total of $26 billion in the United States through 2028.

According to the company, this integrated mill is a first-of-its-kind project in the United States, seamlessly connecting on-site direct reduced iron production, electric arc furnace steelmaking, and downstream rolling of automotive steel. This production process is expected to cut carbon emissions in crude steel production by approximately 70% compared to the company's traditional blast furnace method used in South Korea.