AlMg10 LOGO. Stronger than steel. BelMetComposite

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1 AlMg10 Stronger than steel

2 Contents 1 Summary Business problem Proposed method of problem solving Implementation approach Project planning Protection of investments Business process Development prospects Conclusion

3 1. Summary jointly with partners possesses unique technologies based on long-term research and experiments. These technologies are based on open opportunities to regulate solid-liquid phase transitions in the conditions when various nature field forces are applied to crystallization process. At the present time is making products with the specifications unreachable within the modern metallurgic conversion. The Company has found some cost-saving alternatives to granular and powder technologies and methods to obtain uniform crystallographic structures of casts, has built gravity casting machine for treatment of liquidalloys, crystallization and heat treatment in centrifugal fields of forces allowing for casts with given structural parameters and materials with high features. Scientific novelty of the method, unique strength properties of new aluminum alloys and technological possibilities of its application in industry are proven by scientific research.

4 2. Business problem One of the major trends in the development of machine-building complex of almost any industrialized country is the development of technologies for production of aluminum alloys with a high level of mechanical and service properties. These tasks are the most relevant for such global industries as automobile, aircraft and power industries. Analysis of known basic scientific trends in industrialized countries shows that doping and modification methods used for improvement of alloys properties, are largely exhausted and no longer give those changes in the mechanical and performance properties, which would provide a new quality level of products from aluminum alloys. In this regard, the search for new innovative technological methods of improvement of both mechanical and service properties of alloys is a crucial scientific and technical task, on which depends the further modernization of engineering alloys.

5 3. Proposed method of problem solving Technical aspects A new innovative aluminum material was developed with interesting possibilities for application in production of sheet rolling materials and cable products:

6 3. Proposed method of problem solving Technical aspects (continued) Moderately cold formed AlMg10 alloy gives a strength level like a high strength construction steel as shown in a flow curve (= yield strength) comparison with different construction steels. Cold deformed AlMg10 alloy at strain 0.45 has a strength which is higher than the yield strength of typical construction steels as: S235JR (St37) = 235 MPa, S275JR (St44) = 275 MPa or the high strength construction steel S355JR (St52) = 400 MPa. This strength of AlMg10 alloy in a cold strain hardened stage offers unique possibilities in production of sheet materials and wire rod applications as electrical power cables in power transmission networks.

7 3. Proposed method of problem solving 3.1. Innovative power cable The material can be formed to rod sizes, we have achieved in tests in our laboratories wire rod diameters down to 0,5 mm diameter. A typical power high voltage transmission line is shown on the following picture: А) 110 kv-power line B) 400 kv-power line The problem for a power cable is the sag f between the transmission towers and the load stresses in the cables between the fixing points at the towers. Cables of AlMgSi alloy are used due to low electrical resistance, but these cables need a core of high strength steel rods to take the loads. The steel core increases the weight and do have bad electrical properties compared with Aluminum.

8 3. Proposed method of problem solving 3.1. Innovative power cable (continued) A typical power cable is shown below: A power cable acc. to DIN EN Aluminium wire rods Core steel wire rods for a 400 kv power line, a typical cable is: 1046A1/45-St1A, with 72 Al-rods of 4,3 mm, area 1045,6 mm² and 7 steel rods of 2,87 mm, area 45,3 mm² total cross section area 1090,9 mm² cable weight for 1 km: 3248,2 kg calculated cable fracture load: 218,92 kn limit stress 200 MPa The calculation of cable loads is a very complex and difficult method and need mathematical skills. For a detailed study about the possibilities of high strength Aluminum rod materials for high voltage networks without a steel rod core, the load conditions for a cable between two transmission towers must be considered. For this cable a limit tension stress is 200 MPa, due to safety conditions the allowable stress level is much less than this value approx. 50 % of it.

9 3. Proposed method of problem solving 3.1. Innovative power cable (continued) In the meantime due to climate changes the wind loads for cables are a growing problem with needs for cable materials with increased strength, as AlMg10 alloy can provide. Increased strength of Aluminum cable material is of higher importance than conductivity of Aluminum material. The measured electrical conductivity of wire rods from AlMg10 alloy of laboratory manufacturing is comparable with the values of power cables from AlMgSi alloy according to DIN EN Typically, a cable is tightened between two towers to a force of about 20% of the cable materials rupture force. When a cable material of higher strength is used, the cable can be tightened with higher forces, which leads to a significant reduce in the sag encountered between the towers. As a consequence, the tower distances could be enlarged significantly, and power transfer lines can be built with less number of towers. The following picture illustrates this circumstance for tower distances of 500 m, 800 m and 1000 m. Sag Curves to be expected for conventional Aluminum Cable Al-243 with 243 mm² cross section (red curves), and cables from AlMg10 alloy with same cross section (blue curves) for tower distances of 500 m, 800 m and 1000 m. Both tightened to 20% of rupture force.

10 3. Proposed method of problem solving 3.1. Innovative power cable (continued) Generally, a safety factor of at least 2.5 should be present, i.e. the force in the cable should not exceed 40% of the cable rupture force at any time. For a 400 kv power line with a cable 1046A1/45-St1A, according to DIN EN the following results for loads and stresses are calculated: Tower Distance Cable Type Weight/ km Cable Tightening Сable force Maximum Sag Safety Factor 500 m Al / St 3248 kg 20 % 42.3 kn 24 m m Al / St 3248 kg 20 % 44.7 kn 59 m m Al / St 3248 kg 20 % 46.1 kn 93 m m Al / St 3248 kg 20 % 50.2 kn 211 m m AlMg kg 20 % 70.6 kn 12 m m AlMg kg 20 % 77.3 kn 30 m m AlMg kg 20 % 79.9 kn 46 m m AlMg kg 20 % 84.0 kn 100 m 4.97 This comparison shows, that with AlMg10 as a cable material, it is possible to enlarge the tightening forces and therefore reduce sag at comparable or even higher safety factors against cable failure. As an example, with AlMg10, a tower distance of 800 m can be achieved with an increase of only 6 meters in sag at a higher safety against failure, compared to 500 m with the conventional Aluminum/Steel cable.

11 3. Proposed method of problem solving 3.1. Innovative power cable (continued) Another important design condition is the cable temperature in operation, due to sun heat and conduction losses cable temperatures up to 160 Celsius are considered. At this temperature level normal Aluminum cable materials lose strength due to softening effects in microstructure of these materials. The following picture shows the yield strength of AlMg10 material as a function of temperature: For AlMg10 alloy softening starts at 150 Celsius, at 160 Celsius we can expect a yield strength of about 400 MPa, this are superior properties compared with conventional Aluminum materials. From this we can also expect that ageing behavior of AlMg10 alloy is better than conventional material.

12 3. Proposed method of problem solving 3.2. Sheet rolling material Which special mechanical properties this new Al-Mg-material possesses, becomes clear in the following picture, if one compares the flowing tensions of the Al-Mg-alloy with a highly resistant construction steel S-355 (St52-3).

13 3. Proposed method of problem solving 3.2. Sheet rolling material (continued) At a transforming degree of φ = 0,12, the new Al-Mg-material possesses a flow tension, i.e. a stretching limit corresponding to that of a highly resistant construction steel. Thus constructive solution is possible, which permit the same structural resistance at a clearly reduced weight. According to the conclusion of scientific research, aluminum alloy AlMg10 with its strength properties (500 MPa) is comparable with some varieties of construction steel. has carried out works to increase the compressive strength of this alloy to 700 MPa or higher. It is planned to improve of compositions and gravity-processing modes in order to create high-strength aluminum alloys, with similar characteristics not only to steels but also to titanium.

14 4. Implementation approach successful completion of long-term research and development works development of design documentation for the creation of automated gravity-technological complex Implementation contract with the Research Center on the creation of the industrial technological equipment

15 5. Project planning 5.1. Technological equipment Complex of pilot innovative equipment consists of three parts: Automated gravitational and technological complex automated gravitational and technological casting complex, output products of which are blanks from high-strength aluminum alloy AlMg10 technological line 1 for the production of finished products - electric power cable without steel core technological line 2 for the production of finished products - high-strength sheet rolling materials It is provided simultaneous execution of works on all three components of the project.

16 5. Project planning 5.2. Project execution, time frames and payback period Research Center offers manufacturing premises for showroom, where will be situated production technological lines for manufacturing of sheet rolling materials and electric power cables, as well as line of automated casting complex with capacity of 100 kg, 500 kg, 1,000 kg and 2,000 kg per melt. Terms of project implementation Pay-back period 2 years from start of financing and before "field" testing and certification of pilot batches of products within 3-6 months after "field" testing and certification of pilot batches of products. By means of selling of licenses on production technology for manufacture of products from AlMg10 alloy.

17 5. Project planning 5.2. Project execution, time frames and payback period (continued) for designing and manufacturing of automated casting complex line with capacity of 100 kg, 500 kg, 1,000 kg and 2,000 kg. And also on the research laboratory on the basis of the automated complex of 30 kg capacity for designing and manufacturing of production lines for the production of sheet rolling materials, which is not inferior in strength to steel Investments for designing and manufacturing of production lines for the production of innovative electric power cable without steel core, designed for high-voltage power lines. deployment of the showroom

18 6. Protection of investments Patents and patent applications will be pledged to the investor for the period until the return of investments. For the same period, agreed part of shares of the Company may be transferred to the investor.

19 7. Business process The value chain

20 7. Business process The value chain (continued) has covered the value chain from the idea up to the point of market definition, as follows: Cables Automotive industry Aviation industry Machine construction Military industry Many others In setting up these relations, will keep: Keep the rights of its patents and will share the knowledge with the partner based on a license concept Provide support to foster the further development of the AlMg10 alloy application areas and further development of fundamental research and its application to marketable products Choose a step-by-step approach to serve one market after another (with either one single or several companies)

21 7. Business process The value chain (continued) The future partners of will have to: Focus on (one) single market niche Construct the production line with the support of Research Center Define the products needed for the market niche Allow to participate in the profit generated by the products sold into the market niche Initiate the sales in the agreed regions and within the agreed market niche Define the market strategy to attack the market niche

22 8. DEVELOPMENT PROSPECTS In the short term with no additional capital investments there will be implemented research and technological works on development of technology and equipment on the basis of this method for the following: purification of industrial secondary aluminum alloys from contaminants properties enhancing of alloys of aluminummagnesium group with high content of magnesium (AlMg12, AlMg14, AlMg16), as well as other groups of aluminum alloys (aluminummagnesium-zinc, etc.), aimed at replacement of heavy structures made of steel and cast iron to lighter constructions from aluminum alloys with the high strength production of aluminum products for military equipment with a multilayer laminated structure, having a high level of mechanical properties, including armor materials obtaining of new composite alloys on various bases (titanium, vanadium, nickel, manganese, copper), aimed at creation of alternative compositions with improved properties for the enterprises of machine-building industry

23 9. Conclusion This presentation has been prepared as a basis of negotiations, and only provides highlights of the actual situation as wishes its patented know-how has become available on the market. Thus, mainly will license its patented know-how to one or more partners in each market niche and will jointly develop "market out" - approach, which includes the creation of a specific production line.