Posco,a south korean firm that is the world's fourth largest steelmaker,likes to prove its critics wrong.It proudly points out that the World Bank refused to put money into the company when it was founded in 1968,saying South Korea would never be able to support a steel industrie.But POSCO prospered and became the engine for the countries remarkable industrialisation.Now the company is trying to convince sceptics that it should buy the world's third -biggest shipbuilder,Deawoo Shipbuilding&marine Engineering(DSME).A 50.4% stake in the company,worth $7to 8 billion is up for sale.

Like other steelmakers,POSCO has sought to acquire MINES to insulate itself from the commodity- price boom.The company has stakes in two iron ore mines and seven coal mines in Australia.Mr Lee of Posco says the firm is looking to buy mines in Africa,Siberia,Indonesia and Eastern-Europe,and has a goal THAT 30%OF ITS RAW MATERIALS should be supplied by mines in which it has a stake.

Here comes the point imho,

Previously,says Mr Lee,steelmakers competed on the basis of their products."Companies with better technology had an edge,"he says."Now it has changed. Companies with mines have the advantage."Some investors,who are sceptical about Posco's bid for DSME,agree.They would prefer Posco to concentrate on buying access to raw materials,as its rivals are.

Have a good Friday all,

Inca.