Steelmaking is an extremely energy-intensive process. In 2003, we used the equivalent of 15,070,000 tons of petroleum (TOE) to fuel our operations. Coal, the reducing agent used to extract iron from ore, accounts for about 91% of the total. The waste gases recovered in that process are used in other production processes as well as power generation. The rest of our energy needs are met by clean-burning LNG (3.8%), electricity (5%), and crude oil (0.2%).

In 2003, our major energy-related accomplishments included the installation of convertor-gas heat-recovery boilers at the Pohang No. 2 Steelmaking Plant and variable-speed fluid couplings on descaling pumps at our Gwangyang hot-rolling mills. We also completed development and implementation of an online energy management system that allows us to continuously monitor usage at each discrete manufacturing process.

As part of our efforts to identify opportunities for energy savings, we work closely with each manufacturing department to conduct comprehensive inspections, holding monthly meetings with each facility to analyze usage and promote conservation with frontline workers. This ongoing inspection and progress review process enables us to consistently meet our goals. In 2003, we achieved 107% of our energy conservation goal, saving 110,000 TOE in 381 projects at Pohang and 132,000 TOE in 312 projects at Gwangyang. Over the next five years, we aim to cut annual consumption by 466,000 TOE, saving upwards of KRW 122 billion annually as well as substantially reducing greenhouse gas emissions.

Serving the Community Department-organized community service is a proud POSCO tradition that began in 1991. Today, our departments have strong community ties with 212 local government and service organizations serving over 60% of the population in both Pohang and Gwangyang. The range of activities we support is just as diverse as the community groups we serve?from agricultural and marine product bazaars, to farm equipment repair, to fundraisers for children with terminal diseases. In addition to building closer relationships with local communities, these activities have the added benefit of burnishing our corporate image, creating a healthy rapport that helps avert potential issues of conflict before they arise.

Our tradition of volunteerism also extends to employee-organized service groups. In 2003, there were 192 registered groups?99 in Pohang and 93 in Gwangyang?with a total of 19,508 members participating in activities ranging from work projects to scholarship funds. This outstanding service record was honored once again at the National Volunteer Service Competition sponsored by the Joongang Ilbo for a remarkable sixth-straight year. In May 2003, we founded “POSCO Volunteers”, an organizational framework for our community service efforts that will bring us and our neighbors even closer in the years ahead.