POSCO will spend 2.2 trillion won ($1.97 billion) by 2013 on building two new plants and renovating a stainless steel mill, the steelmaker announced Friday.

Under the plans, approved by the company’s board of directors Friday morning, POSCO will build a new FINEX facility and a fourth plant producing steel coils at its steelworks in Pohang, North Gyeongsang Province.

Developed by POSCO and put into commercial use in 2007, the FINEX technology is the first commercial steelmaking technique that does not require a blast furnace.

The company currently operates two other FINEX plants with a combined production capacity of 2.1 million metric tons.

POSCO plans to begin works on the third FINEX plant in June, with the aim of completing the facility in the same month of 2013.

The new FINEX plant will have an annual production capacity of 2 million tons.

According to POSCO, a FINEX plant requires about 20 percent less facilities investment to build, and its operating costs are 15 percent lower than blast furnace steel mills of comparable capacity.

The works on the coil-making plant, which will be able to produce 700,000 tons of such products on an annual basis, are scheduled to take place between December 2011 and May 2013, the company said.

The renovations on the stainless steel mill will be conducted over the same period. Once complete, the facility will be able to produce stainless steel from molten steel produced by the company’s blast furnaces rather than scrap steel, allowing a reduction of 80 billion won in costs each year, POSCO said.

By Choi He-suk  (cheesuk@heraldcorp.com)