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Potential for CO2 emissions reduction in MIDREX direct

reduction process

Presented by

Hidetoshi TanakaIron Unit Division

KOBE STEEL, LTD.November 6, 2013

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Contents

1. World DRI Production

2. Gas-based DRI Production Technology (MIDREX Process)

3. CO2 emissions reduction in EAF

4. CO2 emissions reduction in BF

5. Conclusions

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World DRI Production

DRI (Direct Reduced Iron)Direct Reduction: The removal of oxygen from iron ore without meltingTFe%:90-94, MFe%:83-89, Met%:92-95, Carbon%:1.0-3.5, Gang%:2.8-6.0

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World DRI Production & Shipment

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

10

20

30

40

50

60

70

80

1975 1980 1985 1990 1995 2000 2005 2010

DR

I R

atio in EA

F (%)

DR

I P

roduction, D

RI Shipm

ent（M

t/y） World DRI Production

Total DRI Shipment

DRI Ratio in EAF(%) 54

� World DRI production was 74 million tons in 2012

� World DRI shipment increase gradually due to strong demands of DRI in advanced country.

� Total DRI shipment was 14.8 million tons in 2012.

� DRI ratio in EAF becomes 16% of total EAF charging materials.

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World DRI Production by Process

� MIDREX is a wholly owned subsidiary company of Kobe Steel� Kobe Steel is a leading company of this DRI production field

Why MIDREX ?

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� Of the 67 MIDREX Plants built and started-up since 1969, only 3 have been dismantled and taken completely out of service (Fig.1)

Fig.1

� The reason why MIDREX process covers 60% of world DRI production is due to high performance of stable and simple operation.(Fig.3) Fig.3 World Direct Reduction Capacity

and Production per technology in 2011

� MIDREX plants have achieved high performance

� 33 MIDREX Plants have been operating more than 20 years (Fig.2)

Fig.233 plants

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Natural Gas Based DR Process(MIDREX)

MIDREX® DR Plant Qatar Steel (II)

Country ： QatarStart-Up ： Dec., 2007Capacity ： 1,500,000 t/y

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CH4 + H2O → 3H2 + CO

CH4 + CO2 → 2H2 + 2CODRI/HBI

Fe2O3 + 3H2 → 2Fe + 3H2O

Fe2O3 + CO → 2Fe + 3CO2

Reformer

Shaft Furnace

Standard Process Flow of MIDREX® Process

Heat Recovery

Reformer

ShaftFurnace

Process Gas SystemFlueGas

EjectorStack

NaturalGas

Main AirBlower

Reducing Gas

FuelGas

Feed Gas

Combustion Air

Process GasCompressors

Top GasScrubber

FlueGas

MIDREX ® DirectReduced Iron

Cooling GasScrubber

Cooling GasCompressor

IronOxide

� Natural Gas is used as a reductant.

� Coke is not required.(Pellets/Lump Ore are reduced to produce DRI without being melt in the shaft furnace.)

� DRI is fed to EAF to produce steel.

As the iron oxide descends through the furnace, the iron oxide is heated and reduced

Reason why MIDREX is less CO2 Emission

� As FuelTable shows the CO2 emission rates for combusting methane versus two types of coal.

As the table shows, natural gas emits only about one-half the CO2 per unit of energy as does coal.

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� As Reductant� C + O2 → CO2 :Carbon can remove one mole O2 and produce one mole CO2

� CH4 +2O2→ CO2 + 2H2O :Methane can remove two mole O2 and produce one mole CO2

These characteristics make natural gas an ideal energy source for ironmaking.

Energy Source

CO2 Emissions

(kg/GJ)

Natural gas (CH4) 49

Bituminous metallurgical coal 90

Bituminous steam coal 94

Decrease in natural gas consumption with MIDREX Process development

DIRECT FROM MIDREX 2nd QUARTER 200410

� Energy usage in direct reduction shaft furnaces has decreased by about 30% over the past forty years.

� This has occurred gradually over the years in the course of overall process development.

1: 480°C combustion air preheat2: in situ reforming3: 540°C combustion air preheat and 400°C process gas preheat4: 650°C combustion air preheat and 540°C process gas preheat5: Top gas fuel preheat6: Preheat of natural gas used for transition zone and enrichment

� Six stages of natural gas reduction are indicated, which equate to the following process upgrades:

Hot Charging DRI to the EAF Options

DIRECT FROM MIDREX 2nd QUARTER 200711

GET IT WHILE IT’S HOT

� Carbon emissions can be further reduced by hot charging the DRI to the EAF

� MIDREX has developed three methods for discharging the DRI at elevated temperature, transporting it hot to the meltshop, and charging it to the EAF at 600-700° C

� These methods lower the electricity required per ton of steel produced, which also reduces CO2 emissions from the power plant.

� Electricity consumption can be reduced about 20 kWh/t liquid steel for each 100° C increase in DRI charging temperature.

� Thus, the savings when charging at over 600° C are 120 kWh/t or more.

� Traditionally, MIDREX Plants have cooled the DRI and stored it for later charging to the EAF.

MIDREX Plant Rated Capacities by Year

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0

0.5

1

1.5

2

2.5

1960 1970 1980 1990 2000 2010 2020

Pro

du

ctio

n C

ap

aci

ty(M

t/y

)

Year

Operating

Construction

SUPER

MEGAMOD

MEGAMOD

Series750

Series500

MINIMOD

� Production capacity of MIDREX plant has been increased year by year.� New MIDREX “SUPER MEGAMOD” DR plant is designed for an annual capacity of 2

million tons of HBI. It will be the largest single HBI producing module in the world.

VoestalpineCorpus Christi, Texas, USA.

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1

2 3

45

6

7

8

91011

12

13

14

15

16

171819

2021

22

2324

25

26

2728

29

30

31

3233

34

35

36

37

1. Acindar2. ArcelorMittal Montreal 1

ArcelorMittal Montreal 23. ArcelorMittal Hamburg4. ArcelorMittal Lazaro Cardenas5. ArcelorMittal Pt. Lisas 1-36. ArcelorMittal South Africa7. Antara Steel Mills8. Arfa Steel9. Comsigua10.DRIC 1-2

11. ESISCO12. Essar Steel 1-613. EZDK 1-314. Ferrominera Orinoco15. Global Steel Holdings16. Hadeed A - E17. HOSCO 1-218. IGISCO19. IMPADCO20. JSW Ispat Steel

21. JSW Steel22. Jindal Steel & Power23. Khorasan Steel24. Khouzestan Steel 1-525. LGOK 2, 326. Lion DRI27. LISCO 1-328. Mobarakeh Steel A - F29. Nu-Iron30. OEMK 1-4

31. Qatar Steel Co. 1-232. Jindal Shadeed33. SULB34. Tenaris Siderca35. Sidor 1

Sidor 2 A - C36. Tuwairqi Steel Mills37. Venprecar

Locations of MIDREX® DR Plants

Natural Gas Producing Countries

Total 62 plants are under operation

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Potential for CO2 emissions reduction by using DRI/HBI

(1) In EAF Steelmaking Process(2) In BF/BOF Steelmaking Process

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Difference between BF -BOF steelmaking process and EAF steelmaking process

0 500 1000 1500 2000

BF-BOF

EAF

CO2 Emission (kg/ton-Steel)

・・・・ CO2 Emission for EAF is approximately 25% of that for blast furnace.

• The steel scrap normally contains impurities such as Cu, Sn, Pb, etc. which often limit its usage to satisfy the product quality

BF-BOF

高品位鉄鉱石＋高品位石炭（原料炭）から高品位の鉄源を製造する。

Iron Ore

Coking Coal

Sintering

Blast Furnace (BF)

Molten Iron

Basic Oxygen Furnace (BOF)

Coke OvenRolling

EAF EAF

RollingSteel Scrap

DRI, HBI, Pig Iron

Ironmaking at a low investment cost

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EAF Crude Steel Production Ratio

・ EAF steelmaking is rising due to more scrap in advanced countries.

0%

10%

20%

30%

40%

50%

60%

70%

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

EA

F C

rude Steel P

roduction R

atio

USAUSAUSAUSA

KoreaKoreaKoreaKorea

EU15EU15EU15EU15

WorldWorldWorldWorld

JapanJapanJapanJapan

ChinaChinaChinaChina

Energy Requirements and Carbon Emissions for Steelmaking Routes

Reference : MILLENNIUM STEEL 2007

1959

1140

1033

713

784

1175

466

6.2

10.8

11.6

10.6

16.8

18.1

16.8

0

500

1000

1500

2000

2500

B

F

-

B

O

F8

0

%

-

C

o

ld

D

R

I8

0

%

-

H

o

tD

R

I

3

0

%

-

C

o

ld

D

R

I

3

0

%

-

H

B

I

3

0

%

-

Iro

n

N

u

g

ge

t

1

0

0

%

-

S

c

ra

p

Kg C

O2/tLS (C

arbon em

issions)

0

2

4

6

8

10

12

14

16

18

20

GJ/tLS (Total energy)

Carbon emissions

Total energy

� Steelmaking by feeding either the DRI or the HBI to the EAF together with the scrap can significantly decrease the CO2 emissions while satisfying the steel quality by diluting the impurities containing in the scrap.

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Potential for CO2 emissions reduction by using DRI/HBI

(1) EAF Steelmaking Process(2) BF/BOF Steelmaking Process

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US DRI Projects Status

World DRI and Pellet Congress 2013, 101

Company Location Capacity(kt) Status Start-up

Nucor Lousiana 2,500 Confirmed 2013

Nucor Lousiana 2,500 Permitted- not approved 2015+

voestalpine Texas 2,000 Confirmed- needs permitting 2016

Bluescope Ohio 1,000 Under consideration 2016+

Essar Steel Minnesota 2,500 Permitted - not approved 2016+

Severstal NA Mississippi & Trinidad n/a 1.5m tpy project rejected

US Steel Minnesota n/a Under consideration 2016+

� Falling gas prices a boon to DRI production in the U.S.A.

� There are two movements

(1) BF substitute

(2) HBI utilization in BF

World DRI and Pellet Congress 2013, 104

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Original Plan BF

Iron Ore

Coking Coal

Sinter Plant

BF

Hot Metal

Basic Oxygen Furnace

Coke Oven

Rolling Mill

Current Plan Gas-DR

EAF

Nucor Louisiana Project in the U.S.A. (2.5Mt/y)

Rolling Mill

Scrap

DRI

Pellet Plant

Iron Ore

Gas-BasedDR Plant

Shale Gas

• Lower capital cost of a DRI plant – around half that for an equivalent blast furnace

• Lower greenhouse gas emissions.

•Reduction Cost EvaluationCoking coal=175$/t Gas=4$/mmBTUBF:144$/tGas-DR:44$/t ↓↓↓↓Diff. 100$/t

•1st Phase:2.5Mt/y mid-2013 •2nd Phase:6-7Mt/y

� With the cheap shale gas, construction of the large-sized gas DR plant was started in the U.S. instead of construction of the BF

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HBI utilized in BF• The use of HBI in Blast Furnaces is not new

• AK Steel began using HBI in their Middletown blast furnace in 1989

• Blast furnaces in Canada, Western Europe and Japan have also begun using HBI

• HBI is typically less than 30% of the charge

• HBI is often used when additional hot metal is required

• For each ten percent (10%) of the iron charged into the blast furnace as metallic iron:(1) Productivity is increased by 8%(2) Fuel rate is decreased by 7%

• HBI also lowers the CO2 emissions perton of hot metal produced

SSS NYC - Midrex Presentation 6-18-12

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Voestalpine constructing MIDREX direct reduction plant in Texas, USA

Corpus Christi, Texas,

Brazil iron ore mine

Austrian steel production sites in Linz and Donawitz

Iron ore pellet

ＨＢＩ

� The decision on the construction of the Voestalpine direct reduction plant in North America has been made.

� The plant will be constructed on just outside the city of Corpus Christi, Texas, USA.

� The planned facilities are designed for an annual capacity of around 2 million tons of HBI and DRI.

� The investment volume is around EUR 550 million.

� The plant is due to begin operations in early 2016.

� This will provide the Austrian steel production sites in Linz and Donawitz with access to cost-efficient and environmentally-friendly HBI and DRI pre-materials, ensuring their competitiveness over the long-term.

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� Overseas shift of the reduction energy and utilizat ion of HBI as energy container can realize significant CO2 reduction in the consumer site.

� Transportation weight and related CO2 emission beco mes half.

Future ironmaking Model

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ConclusionsConclusions1. MIDREX gas-based DR technologies is the process to produce iron

units which are advantageous in terms of the CO2 emissions. Because this process can use natural gas as a reductant and a fuel source.

2. Considering the increase of the scrap supply to the steel market, feed of the scrap in the EAF with the DRI/HBI is expected to be effective and practical solutions in terms of the CO2 emissions.

3. With the cheap shale gas, construction of the large-sized gas DR plant was started in the U.S. instead of construction of the BF

4. Future ironmakingh model will be to produce the direct reduced iron near the energy competitive sites and transfer these products as an energy container to consumer sites.

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Thank you for your kind attention!