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July 1, 2008

BREAKING NEW GROUND

Booming energy and materials costs and looming greenhouse gas penalties spark a variety of projects.

 
Illustrations by Walter Vasconcelos

A consortium that includes London’s Rio Tinto, Charlotte, North Carolina’s Nucor, Japan’s Mitsubishi and China’s Shougang, and others led by South Korea’s Pohang Iron and Steel Co. (POSCO) and China’s Shanghai Baosteel Group, are ramping up cost- and energy-efficient, and environmentally sound new processes for making molten iron. Ft. Wayne, Indiana’s Steel Dynamics Inc. next year will be the first to use commercially a third low-cost, energy-efficient process that, like Rio Tinto’s, can be used for replacing scrap and highpriced iron in one of its mini-mills.

Canada’s Rio Tinto Alcan, Pittsburgh’s Alcoa and others are experimenting with new cathode technology that reduces aluminum production cell energy use by as much as 20%.

The metals industry has clearly hit a new wave of manufacturing innovation and experimentation. Fueling this innovation in the steel and aluminum industries are harsh but familiar economic and environmental challenges. The cost of raw materials used to make finished metals keeps rising, to the point that even with record high metals prices, producer profit margins have been squeezed. Meanwhile, around the globe, governments struggle with a range of solutions to abate greenhouse gas (GHG) emissions that many believe are warming the planet.

The metals industry has, of course, always invested in research and development aimed at improving processes and products, but the new cost and environmental pressures are unprecedented. In response, the industry is exploring new production and process alternatives that promise to reduce GHG emissions, improve manufacturing efficiencies, and cut energy and raw materials costs. In some cases, these could eliminate the use of some high-cost materials and processes altogether.

DECIDING FACTORS

Materials and energy prices naturally will largely determine how widely these innovations are adopted. At the same time, the Rio Tinto, Steel Dynamics, POSCO and Baosteel projects in particular show real promise for offsetting higher projected costs.

By end of this year, Rio Tinto predicts it will produce 100 tons per hour of pig iron at its three-year-old energy- and cost-efficient HIsmelt plant at Kwinana in Western Australia. HIsmelt, short for high-intensity smelting, eliminates sintering and coking from the process, offering a previously unheard of flexibility in using and quickly switching among various grades of iron fines and coal. Switching from one grade to another takes a day with HIsmelt, compared to months at most conventional blast furnaces.

“We can change over from one type of coal to another in a day,” says Neil Goodman, Rio Tinto’s general manager technical. “Tomorrow, we’ll be running on the new coal.” With the price of soft coal about $50 less per ton than coking coal, and with iron fines about $15 less per ton than higher-grade ore, the plant saves about $50 per ton on materials costs, Goodman says.

The company bills the process as less energy-intensive and polluting than blast furnaces, recycling all of its offgases, for instance, and putting out 20% fewer carcinogens. Rio Tinto says it saved as much as 40% on construction costs alone by eliminating those sintering and coking units. Although the plant is not running at full capacity yet, talks are already under way to license HIsmelt to Chinese companies Laigang Group and Jiangsu Huaigang Group Co., and NMDC of India.

At the same time, steelmaker POSCO has developed its own process using iron-ore fines. Its first full-scale FINEX plant went online at the Pohang, South Korea, works in early 2007. The facility has a rated capacity of 1.5 million tons of hot metal annually for use in POSCO’s steel-making facilities. The company plans to replace all of the blast furnaces at Pohang, a complex now producing about 30 million tons of steel a year, with FINEX technology. The company reports it saved 20% in construction costs on this first unit and lowered production costs by 15% compared to a conventional blast furnace facility. The environmental improvements are significant, as well. POSCO says emissions such as sulfur and nitrogen oxides were some 90% lower at its initial test plant than in a conventional facility, and wastewater contamination dropped by as much as 98%.

While POSCO and the VAI division of Germanybased Siemens AG developed the FINEX process, POSCO holds the patents. POSCO considers the process so successful that it will be important to its global expansion plans. It has already announced plans for a $12 billion, 12-million-ton-a-year plant in India’s Orissa State. Construction has been delayed and postponed because of local protests, but may begin later this year.

Baosteel, in late 2007, started up its first Corex C-3000 plant, with a nominal production capacity of 1.5 million tons of steel per year. The plant uses the latest generation of Siemens’ Corex technology, first developed in the 1970s. The Corex process produces pig iron without coking coal, reducing raw-materials costs and environmental emissions. When Baosteel needed to relocate its Pudong works to create space for the World Expo 2010, the producer made the decision to bring the technology to China for the first time in its new plant. Plans are now under way to open a second Baosteel Corex plant by 2010.

Meanwhile, across the globe in Hoyt Lakes, Minnesota, Steel Dynamics is scheduled next year to open the first commercial plant in the United States to produce low-cost iron nuggets that substitute for higher-cost scrap and iron ore. The Mesabi Nugget plant, the first to use the ITmk3 process developed by Japan’s Kobe Steel, is expected to produce annually 500,000 metric tons of 96% to 98% pure iron nuggets from taconite, which is plentiful throughout northern Minnesota and Michigan.

Like HIsmelt-made iron, the nuggets can be used as a substitute for imported pig iron, which was running about $900 a ton delivered to Steel Dynamics’ Butler, Indiana, plant in June, compared to about $300 a ton for the Mesabi nuggets. Steel Dynamics plans to add 10% to 15% nuggets to the scrap fed into its furnaces. But depending on future raw materials prices, that figure could increase to 20% or more.

RESEARCH FRONT

Advanced research has also turned to carbon footprint reduction. “We’ve basically squeezed all the energy we can out of today’s processes, including a 29% reduction in steelmaking energy intensity overall since 1990,” says Lawrence Kavanagh, vice president of manufacturing and technology at the American Iron and Steel Institute (AISI) in Washington, D.C. “The long-term solution will come from one or two areas, and hopefully both. We need to use less carbon as a fuel in making steel—although it will continue to be needed as an alloy material—and we need to sequester the CO2 to keep it out of the atmosphere.”

AISI, along with other industry groups around the world, individual steel manufacturers and governmental agencies, supports research into various technologies to achieve what Kavanagh describes as moving from the current carbon fuel-intensive practices to carbon-light or carbon-free. The breakthrough technologies for producing iron that may reduce emissions of CO2 more than 70% are now in pre-pilot stages and have the potential to move into production in about 15 years, he says.

One of those, hydrogen flash smelting, under development by Hong Yong Sohn, Ph.D., professor of metallurgical engineering at the University of Utah in Salt Lake City, like ITmk3, begins with taconite concentrate fines. But hydrogen replaces carbon as the reducing agent to separate iron from oxygen, which eliminates CO2 formation, so the process produces water vapor instead. Sohn expects the technology to be applied within five years by a major steel company looking to pour support and financial resources into accelerating the process’s adoption. This process is also dependent upon the future availability of hydrogen and costs of carbon emissions and energy.

A second carbon-free technology, molten oxide electrolysis, is being developed by Donald Sadoway, professor of materials science and engineering at the Massachusetts Institute of Technology in Cambridge, Massachusetts. “[Next] we have to demonstrate that the process is capable of running at a sufficiently high temperature at an industrial scale,” Sadoway says. But the potential is enticing: CO2 emissions could be reduced at least five-fold from current processes, depending on the source of electricity.

The aluminum industry, too, is working to produce greater efficiencies. For many years, technological change in aluminum has been driven mainly by the need to increase production cell capacity, says Tom Campbell, vice president of technology and operational excellence at Rio Tinto Alcan. His company has increased cell productivity in smelters more than 500% over the last 50 years by increasing the amperage and thus the capacity of production cells. The equation is simple: the greater the current’s strength, the better the plant’s efficiency and output.

But now, he says, “the focus, certainly for us, is gradually changing to energy efficiency and greenhouse gas reduction.” Some 20% to 30% of the cost per ton of the metal is energy, he explains. While the amount of energy used per ton has decreased 20% to 25% over the past 30 to 40 years, “if anything, the cost per ton has increased because of the higher cost of energy,” he says.

To bring that cost down, Rio Tinto Alcan is developing an experimental version of its technology platform called AP-Xe, which Campbell calls “the biggest single change in aluminum reduction technology in over 100 years and one of the important ingredients to improve the energy efficiency of the cell between 10% and 20%.” Still in the trial stage, AP-Xe uses a new cathode technology, called a drained cathode, which is made of a proprietary material that uses energy more efficiently.

Other promising areas of research “are new types of anodes, particularly inert anodes, which generate oxygen rather than CO2, and carbothermic reduction, which uses a chemical reaction rather than electrolysis, to produce aluminum,” he says. “This would be a major change in how aluminum is made and create savings of 15% to 20% in electricity consumption.”

Alcoa has shown a particular interest in carbothermic reduction, undertaking research with Norwegian metals producer Elkem for the U.S. Department of Energy. Another Norwegian company, Norsk Hydro ASA, an aluminum supplier, is also working on next-generation cell technology at its Ardal Research Center. It began with six experimental cells that earlier this year reported improving energy efficiency in excess of 95%. Its next research targets are cutting heat loss and recycling that heat from aluminum production cells, in addition to further reducing GHG emissions. Norsk Hydro has already cut GHG emissions from the electrolysis process by some 65% since 1990 using a proprietary electrolytic process and higher amperages.

EXPERIMENTAL MEASURES

Both the U.S. federal government and a variety of industry groups are looking at various processes to sequester CO2 once it is produced by industrial processes, including burying it in deep aquifers where it can’t leach. But coal-burning electric utilities, which were to have taken the research lead for this technology, have cancelled or delayed a variety of projects this year as a result of everything from questions about the feasibility of the technology and methodology to hefty estimated cost overruns.

Luxembourg-based ArcelorMittal and Nucor Corp., in partnership with Brazil’s Companhia Vale do Rio Doce (CVRD) and others, are testing biomass sequestration by planting and harvesting tens of thousands of acres of eucalyptus trees in Brazil. The trees, through natural photosynthesis, absorb carbon dioxide from the atmosphere. They are then chopped down to produce charcoal, which is used in pig iron furnaces.

Conventional pig iron production creates nearly two tons of CO2 for every ton of iron produced. Using eucalyptus charcoal eliminates just over a ton of CO2 for every ton of pig iron produced. ArcelorMittal’s blast furnaces, using the “vegetable charcoal” from its 46,000 acres of trees, are now manufacturing 360,000 tons of molten iron annually. The technique is expected to reduce CO2 emissions by some 10 million tons between now and 2015. The Nucor-CVRD project maintains some 75,000 acres of eucalyptus.

In addition, a variety of more experimental projects are moving forward. One being developed at the Missouri University of Science and Technology (MUST) in Rolla bubbles carbon dioxide back through the slag produced in basic oxygen furnaces and electric arc furnaces to produce calcium carbonate—essentially limestone—and other mineral carbonates. Called sequestration by aqueous carbonate formation, Von Richards, Ph.D., of MUST’s Materials Science and Engineering Department, says the process is fast and economical because both necessary raw materials are on-site. Moreover, since it begins with grinding up the hardened slag, which frees up residual iron, it is potentially a source of revenue.

The timing could be right for commercial viability. “Very few people believed before this that people could make money on the iron recovered,” Richards says. “And we can get 50% of the CO2 out pretty easily. The next 50% will be tougher, however, depending partly on the speed we can get out of the reaction.”

Kent Peaslee, Ph.D., who is developing the process with Richards, says, “If the U.S. becomes like Europe and CO2 has a dollar value, there will be a lot of reason to do this.”

Indeed, Europe is experimenting broadly with ways to reduce CO2 emissions. The umbrella Ultra Low CO2 Steelmaking (ULCOS) program involves 48 European companies and explores ways to minimize or capture CO2 emissions at all stages in steel production.

“In the past 40 to 50 years, we’ve cut CO2 emissions about 60% by reducing energy consumption,” says Jean-Pierre Birat, European coordinator of ULCOS and head of sustainability research at ArcelorMittal. “But at some point, you come up against physical laws, so you have to do it in other ways.”

The process closest to commercial implementation consists of capturing the CO2 in blast furnace top gas with vacuum pressure swing absorption and then storing the separated CO2 in a deep saline aquifer. ULCOS has begun to use a small-scale experimental blast furnace in Lulea, Sweden. “The efficiency in the experimental blast furnace is very high—about 98% recovery,” Birat says. “Our target was to find a solution for 50% of the CO2 produced across the entire steelmaking process. We’ve achieved 65%.”

SMART MONEY

Of course, a lot can happen between the lab and a pilot program, or between a pilot and a fully scaled-up commercial process. Some carbon reduction efforts likely will not survive for technological or financial reasons, or both. But the global drives to reduce GHGs will be with us for the foreseeable future.

The main question is how serious various governments are about cracking down on GHGs within their borders. So far, China and India are balking, waiting, they say, for the United States, the European Union, Brazil and even Russia to impose effective measures and the inevitable costs on their own industries. It is entirely possible that government efforts to curtail global warming could dissolve in a wave of finger pointing and accusations of hypocrisy.

It may be, though, that continuing high energy, electricity, coal, iron ore and other raw materials prices will turn out to be the most powerful drivers of innovation. That is certainly the case with the HIsmelt, FINEX and Mesabi nugget plants. The aluminum industry, if its own analysts are to be believed, will face continuing challenges dealing with the cost and availability of electricity. So Rio Tinto Alcan’s work on the AP-Xe technology platform and Alcoa’s intense interest and research with carbothermic reduction are both hopeful signs that the cells that produce aluminum have a more cost- and pollution-efficient future.

THE SHORT OF IT

Technology Developer How It Works Status Benefits
HISMELT (HIGH-INTENSITY SMELTING) Rio Tinto HIsmelt produces pig iron, and eliminates sintering and coking from the process. It permits quick switching ability among various grades of iron fines and coal. The technology has been implemented at the HIsmelt plant at Kwinana in Western Australia since 2005. Talks are under way to license it to Chinese companies Laigang Group and Jiangsu Huaigang Group Co., and NMDC of India. The Kwinana plant saves $50 per ton on materials costs, and emits 20% fewer carcinogens.
FINEX Pohang Iron and Steel Co. (POSCO) and Siemens AG FINEX produces molten iron using iron-ore fines and eliminates traditional blast furnaces. The first full-scale FINEX plant went online at POSCO’s Pohang, South Korea, works. Plans are under way to incorporate it in at a plant in India’s Orissa State. POSCO saved 20% in construction costs on the first unit and lowered production costs by 15%. Emissions are 90% lower, and wastewater contamination is reduced by 98%.
COREX C-3000 Siemens AG This latest-generation Corex technology, implemented by Baosteel, produces pig iron without processed coking coal. In late 2007, Baosteel started up its first Corex C-3000 plant. Plans are under way to build a second Corex C-3000 plant by 2010. The process reduces rawmaterials costs and environmental emissions.
ITMK3 Kobe Steel The technology produces low-cost iron nuggets that substitute for higher-cost imported pig iron. Steel Dynamics’ Mesabi Nugget plant in Hoyt Lakes, Minnesota, which will use ITmk3, is scheduled to open next year. The plant is expected to produce 500,000 metric tons of 96% to 98% pure iron nuggets from taconite. In May, those nuggets were about one-third the price for imported pig iron.
HYDROGEN FLASH SMELTING Hong Yong Sohn, Ph.D., professor of metallurgical engineering at the University of Utah The technology begins with taconite concentrate fines, but hydrogen replaces carbon as the reducing agent to separate iron from oxygen. The technology is perhaps five years away from being implemented. Hydrogen flash smelting eliminates CO2 formation, instead using water vapor.
MOLTEN OXIDE ELECTROLYSIS Donald Sadoway, professor of materials science and engineering at the Massachusetts Institute of Technology The technology produces iron by molten oxide electrolysis. It uses electric currents to break the bond in iron oxide. Sadoway and his team must next demonstrate that the technology can run at a sufficiently high temperature on an industrial scale. The technology generates no carbon dioxide. Also, during the process, industrial oxygen is produced as a marketable byproduct.
AP-XE Rio Tinto Alcan AP-Xe uses a new cathode technology, called a drained cathode, which is made of a proprietary material that uses energy more efficiently. The technology is still in the trial stages. Rio Tinto Alcan says the technology will reduce energy associated with aluminum production, improving energy efficiency by 10% to 20%.
NEXT-GENERATION CELL TECHNOLOGY Norsk Hydro ASA The technology, used in the production of primary aluminum, allows cells to concentrate CO2 from anode gas. The technology is currently being tested at Norsk Hydro’s Ardal Research Center in Norway. The next step is to cut heat loss and recycle that heat from aluminum production cells, as well as further reduce GHG emissions. Six experimental cells earlier this year reported improving energy efficiency by 95%. Norsk Hydro has cut GHG emissions from the electrolysis process by some 65% since 1990.
BIOMASS SEQUESTRATION PROJECT ArcelorMittal and Nucor Corp., in partnership with Companhia Vale do Rio Doce (CVRD) Throughout Brazil, the companies are planting and harvesting tens of thousands of acres of eucalyptus trees, which absorb CO2 from the atmosphere. The trees are cut down to produce charcoal, which is used in pig iron furnaces. The blast furnaces, using the charcoal from these 46,000 acres of trees, now manufacture 360,000 tons of molten iron annually. The technique is expected to reduce CO2 emissions by some 10 million tons between now and 2015. Conventional pig iron production creates nearly two tons of CO2 for every ton of iron produced. Using eucalyptus charcoal eliminates just over a ton of CO2 for every ton of pig iron produced.
SEQUESTRATION BY AQUEOUS CARBONATE FORMATION Missouri University of Science and Technology (MUST) The process bubbles carbon dioxide back through the slag produced in basic oxygen furnaces and electric arc furnaces to produce calcium carbonate—essentially limestone—and other mineral carbonates. Since the process begins with grinding up the hardened slag, residual iron is freed up—a potential source of revenue. The process is still in development. The process is fast and economical because both necessary raw materials are on-site. The process reduces CO2 by 50%.
VACUUM PRESSURE SWING ABSORPTION Part of the Ultra Low CO2 Steelmaking (ULCOS) involving 48 European companies The technology captures CO2 in blast furnace top gas with vacuum pressure swing absorption and then stores the separated CO2 in a deep saline aquifer. The technology has been implemented in a small-scale experimental blast furnace in Lulea, Sweden. While the target was to find a solution for 50% of the CO2 produced in the steelmaking process, so far 65% has been achieved.