South Korean steelmaker Posco Group announced Tuesday that its joint venture, Posco Zhongtai Air Solution, has started construction of a high-purity rare gas plant in Gwangyang, South Jeolla Province.

The joint venture was launched in August between Posco Holdings and China's Zhongtai Cryogenic Technology, which own 75.1 percent and 24.9 percent of the entity, respectively. Zhongtai, which specializes in gas-related facilities, is a Chinese cryogenic equipment company listed on the Shenzhen Stock Exchange.

Rare gases, or noble gases -- neon, xenon and krypton -- are commonly used in high-tech sectors, such as semiconductors, displays and satellite thrusters.

Posco is currently the only Korean company producing “crude” rare gases through oxygen plants at its steel mills. Since last year, the company has partnered with Zhongtai to refine these gases, aiming to supply high-purity gases to major semiconductor companies.

The construction in southern Donghoan, near Posco Gwangyang Steelworks, is to be completed by November next year. The new facilities will produce nearly 130,000 normal cubic meters of gases annually, meeting almost 52 percent of the domestic demand in the semiconductor industry.

Posco anticipates this project will lower the nation's reliance on imported high-purity rare gases and support the growth of high-tech sectors, such as semiconductors and aerospace.

“To strengthen our presence in the industrial gas sector, we will also focus on producing special gases from steel industry by-products, and supplying oxygen and nitrogen for rechargeable batteries,” said a Posco official.