March 20, 2008


Basic steelmaking technologies haven’t changed significantly in decades, but several emerging developments may change that.

It’s been some time since the last major shift in the way steel is produced. The blast furnace, after all, was introduced in the 14th century and is still used in as much as 65% of the world’s steel production.

Granted, early blast furnaces produced only one ton of iron per day, compared with modern ones that produce 13,000 tons or more daily, but the concept is still the same. Suddenly, however, some breakthrough technologies are heating up the metals production scene.

Siemens AG’s FINEX technology, which produces pig iron with fewer costs and less environmental pollution than the blast furnace method, eliminates several stages required by blast furnaces, such as coke production, sintering of fine ores and palletizing. The technology uses low-cost materials, such as non-cokeable coal and fine ore, and recycles the gas produced during iron production, feeding it back into the manufacturing process.

In June 2007, Korean steelmaker the Pohang Iron and Steel Co. (POSCO), with an investment of almost $600 million, began implementing the technology at its Pohang Works. Six months later, the plant, with an annual capacity of 1.5 million tons, had produced approximately 650,000 tons of metal. POSCO reports the FINEX technology has reduced production costs by 15%, thanks to the low-cost materials used and the efficiencies created by the leaner process.

A number of European metals giants—including London-based Corus Group (a subsidiary of India’s Tata Steel), Luxembourg-based ArcelorMittal and Germany’s ThyssenKrupp Steel—are investing in more efficient and cleaner metals technologies. The three companies, working with several laboratories, have launched the Ultra Low CO2 Steelmaking (ULCOS) program. Phase One, a five-year initiative that began in 2004 with a budget of $78 million, is examining a range of alternate technologies. The most promising ones will be tested on a much larger scale during Phase Two, which begins in 2009. Although the budget has yet to be set for that phase, it is expected to exceed several hundred million dollars, ULCOS reports.

The American Iron and Steel Institute (AISI) and the U.S. Department of Energy (DoE) are involved in an initiative at the Massachusetts Institute of Technology (MIT) to find ways to produce iron by molten oxide electrolysis. The technology uses electric currents to break the bond in iron oxide and generates no carbon dioxide. As an added benefit, during the process, industrial oxygen is produced as a marketable byproduct.

The sense of urgency to develop new processes is new to the metals industry. “There’s always been a steady drumbeat of innovation [in improving existing technologies],” says Donald R. Sadoway, principal investigator of the AISI/DoE/MIT program and professor in MIT’s department of materials science and engineering. “But [with existing technologies] you get to a point where you’ve made all the changes you can. There might be some things you can do to optimize [efficiencies] here and there, but we’re talking about a difference of a few percent, not a two- or three-times improvement.”

Add to that the increased pressure on the industry to reduce carbon emissions. In Europe, metals companies have little choice but to invest in new technologies, given the carbon tax levied by many governments there. “Imagine if you had a carbon tax of 100 euros, 200 euros, 300 euros a ton,” Sadoway says. “When you start looking at scenarios that put that kind of taxation on carbon emissions, it changes the economics [of investing in new technologies].”