BENEFICATION OF LOW QUALITY IRON ORE AND ITS USE IN DRI PRODUCTION AN ALTERNATIVE TO TURKISH IRON ORE AND STEELMAKING INDUSTRIES.

Transcription

1 BENEFICATION OF LOW QUALITY IRON ORE AND ITS USE IN DRI PRODUCTION AN ALTERNATIVE TO TURKISH IRON ORE AND STEELMAKING INDUSTRIES Muammer BILGIC ECOSID Ltd INTRODUCTION, Below given graph can be considered as spectacular, paradoxal, it gives the route where the world comes and goes. This power shifting affects all aspects of international business, raw material flow, conflicts, political movements and so others. That phonemena affected the steel industry itself in the world and its downwards and upwards. Our subject in that study is to give a short outlook to the future of steel and iron ore industries in the world and specifically in Turkey. The new improvements in the world brought some new opportunities to Turkish Iron Ore companies. Untouched, low quality iron ores became worth to deal and make investments. New market conditions and new Technologies developed recently to use fine ore produced from low quality iron ores brought new opportunities to Turkish Iron ore producers. This new opportunity can be named as benefication of low quality ores into fine concentrate with reasonable investments in different affordable sizes, and to use fine concentrated iron ore in Direct Reduced Iron production which can be used in Electric Arc Furnace based steel making operations in Turkey. Changing demands and market conditions in raw material sources of Turkish steel industry forced them to evaluate alternative new sources in terms of quantity, availability, and quality parameters. A short Outlook to Steel industry together with some graphs and tables tried to be presented as follows. 1

2 Figure 1: Global Power Shifting in Economy. Figure 2 ; World steel production. WORLD STEEL INDUSTRY ; Figure 2, shows the first 15 countries in steel production at the year 2009 and Turkey is the 10 th largest country with Ton steel 2

3 production. The share is % 2.1, the largest one is China with % 44.3 of total world production. Figure 3; Potential of long term growth of Steel demand. World steel production grow around % 3 on yearly basis, Figure 3 shows that sector will grow almost twice until But that growth was not and will not be equal for all regions of the world as can be seen from figure 4. Figure 4 : Historical steel demands by regions. 3

4 Unequal growth of steel demand goes parallel with the unequal development of global economy as can be seen from Figure 5, Figure 5; World manufacturing activity : Figure 6: Historical values in global steel production by regions: Growth of steel production goes paralel with steel demand by regions. Figure 7, shows Regional shares in world steel demand, as it can be seen 4

5 while developing countries growing, developed countries are shrinking. China and India is the dominator countries in that growth, that movement attracts all downward activities of steel related industries to these regions namely iron ore and coal all over the world. Figure 7 : Regional Shares in World Steel Demand. Figure 8: Global Steel capacity by regions 5

6 Figure 8 is another look to this appearance. North Americas share nearly halved within 12 years, almost same thing is happened in EU countries. This is the result of the changes shown in figure 9. Figure 9: Estimated growth rates of major economies within short period of time. Figure 10; Reliance on imported Iron ore of major steel producing countries. 6

7 Figure 11: Leading Iron Ore Exporting countries. Growth of steel industries in developing countries attracted global iron ore sources to these countries as shown in Figure 10 and 11.We can easily say that power is shifting from west to east altogether with economical avtivity and investments specifically in metal producing industries. All forecasts show that steel consumption will not interrupt by following the growing demand in these countries. Figure 12: Asian historical import reliance on iron ore. 7

8 Figure 13; Future of steel making raw material requirements. In order to better understand the new era, we should make a list for the main characteristics of it as given below. i. There is a big potential for growth in raw material and steelmaking operations but not in west of the world, mainly in emerging markets specifically China, and India. ii. That growth attracts all iron ore resources to these markets, iii. The hike in iron ore pricing shifts the power in value chain of steelmaking to the benefits of raw material producers, the unification or conglomeration in that market and growing demand allowed to increase the pricing and related commercial terms of iron ore tremendously. Please note that the world market share of top ten iron ore producers is around % 97, that power shift lead them to make investment in the mode of vertical integrations in steel making chain. There are numerous examples of steelmaking investments done by raw material owners either alone or as a joint venture with big steelmakers in the world. 8

9 iv. All low quality, untouched resources started to consider as worth to deal, the increasing demand for iron ore forced the countries to protect the iron ore resources for their own operations, that protection should be considered as a warning for Turkish steel industry which is the 10th largest steel producer in the world with almost % 70 iron ore import dependance and % 75 imported scrap dependances. The largest scrap importer in the world is Turkey, almost % 25 of total export scrap market of the world is oriented to Turkish steelmakers. That appearance was a big advantage of Turkish steel industry by using ready to ship vast scrap sources of Europa, CIS and US and low investment cost of EAF based mini mills which allowed the steel makers to grow very fast and in dynamic manner. But time changed and many questions arised concerning sustainable and profitable operation. v. As can be seen from figure 14. the local production at conventional export markets of Turkey is reaching to their consumption level, and there is a big threat to become a net exporter contrary to their conventional importer position by using huge cost difference in energy items of steel making and iron ore treatment operations. Figure 14: Future of GCC Region which is used to be conventional export market for Turkish Steel Industry. 9

10 vi. The decrease in scrap availability, price increase and volatility due to monopoly in scrap supply effected profitability of Turkish steelmakers deeply. Parallel to the growth in capacity and production. Turkish steel industry suffered too much by shrinkage in export markets. So the raw material and sales issues becomes main concerns of Turkish Steelmaking industry to keep sustainable profit margin level. Figure 15 : Major scrap exporters. vii. Scrap dependance was the main advantage of Turkish steel industry, but changing conditions and growing demand for low residual high priced scrap started to force them to think virgin iron usage options, namely DRI. viii. Figure 16, should be considered as serious warning to Turkish Steel industry in order to focus on raw material issues and to depend on local own sources. As shown clearly EBITDA margin of the countries having own resources is enourmous, it allows to fill all order books with desired prices contrary to Turkey, if they will reach to the limit of local consumption, they can easily export their products to all conventional Turkish export markets. So ownership, cost, availability issues of raw metalic sources should be the main concern of Turkish Steel Industry. 10

11 ix. That is the reason why we say that changing business environment brought new opportunities to local Iron ore mining companies. The cost and availability of any metallic source will be too critical. x. Figure 17, 18, 19 shows that steel demand will grow in Turkey, and highly probable that export based appearance of Turkey in steel will move to saturate growing local demand in the future. Figure 16; EBİTDA Margins countries. of steel making operations at different 11

12 Figure 17: Steel demand & GDP growth & consumption per capita in different countries. Figure 18: Estimated Steel consumption in Turkey by sectors. 12

13 Figure 19: Per capita consumption of long and flat steel products in major steel producing countries. Until now we try to give a short and clear Picture about World and Turkish Steel making and Iron ore industries. The next pages shall try to explain fine iron ore concentrate, how it can be produced and how it can be converted as a raw material for scrap based Turkish Steel making market. FINE IRON ORE & BENEFICATION & CONCENTRATION ; Iron is the most abundant element in the earth. The majority of this is in the core. In the Earth crust iron is one of the top four elements with 4.6 weight percent, after oxygen, silicon and aluminum. It can be found in the native state in meteoritic masses. It is usually associated with nickel and cobalt. Native iron can also be found in the remains of eruptive rocks. Most of the iron in the crust is found combined with oxygen as iron oxide minerals such as hematite (Fe2O3) and magnetite (Fe3O4), sometimes a hydrated oxide such asgoethite (FeO (OH)) and limonite (FeO (OH) nh2o), beside that it also occurs ascarbonate such as siderite (FeCO3), sulphide such as pyrite (FeS2) and as a component of a wide range of complex minerals. Generally Iron ore is used at Blast Furnaces to produce pig iron, starting from quary to Blast furnace Iron ore undergo many process cycles in order 13

14 to be used efficiently. These proceses could be in many steps or it could be a short way depending on quality of ore and requirement of further processing. Figure 20: Virgin Iron and Scrap Requirement of the world. If existing iron ore quality needs further benefication or mineral processing, a long process cycle should be designed and implemented. Short list of benefication processes can be given as follows. i. The majority of iron ore deposits found in the world were not very high grade due to the presence of other minerals mainly silica. Therefore, the ores must be ground to a fine particle size to allow the iron oxides they can contain to be concentrated or the removal of impurities can be done promisingly. As the blast furnace can only accept particle at certain size thus, the concentrate (fine particle) must be re-agglomerated into large enough particles, so that they can be smelted in the blast furnace. Agglomeration is not required only by Blast Furnace applications, some type of DRI processes needs pellet form as an input of process. ii. Concentration; Until now most of the Turkish iron ore was simply dug, sometimes crushed and then shipped. Most blast furnaces now demand ores with definite structure and chemical specification that make crushing and screening essential. Many furnaces specify ores of high chemical quality which must at least be sized. A low grade ore need to be crushed 14

15 to a liberation size, therefore iron ore can be separated from gangue minerals with appropriate processing method. There are many methods normally used to separate iron oxide from gangue minerals such as, gravity method, magnetic separator, reduction roasting and followed by magnetic separator, floatation and electrostatic. In addition to these methods, some degree of concentration can be achieved by was Figure 21 : Typical small size iron ore washing plant. iii. Washing; Sometimes ores can be enriched by the simple process of washing, such ores that consist of coarse and fine particles of clean ore minerals mixed with either barren sand or clay. In general, clay minerals increase the alumina in iron ore which is easily reduced by washing. Separation of clay minerals consists of a simple scrubbing operation in a log-washer or classifier followed by a screening operation to remove the coarser iron particles, whereas the overflow usually is the waste product.. Washing can only increase Metalic Fe for % 2-3 percentage, probably is not enough for the many local mine quality. iv. Gravity Separation; The common iron oxides are usually sufficiently heavy so that they can be separated, if they are structurally free from the lighter waste minerals with minimum metal loss in tailing, by machine that utilized these specific gravity differences. v. Jigging; is one of the oldest methods of gravity concentration in which its feed is kept in motion by water pulsing vertically through it. The heavier grains move downwards to the bottom of the bed and are 15

16 vi. vii. removed. Since the weight of the grain is governed by its size as well as its specific gravity, it is necessary for the feed to be sized within close limits. Many kinds of jig are in existing according to the size and the nature of the ore. Magnetic separation; Magnetic separators exploit the difference in magnetic properties between the ore minerals and are used to separate magnetic mineral (magnetite), in some application hematite, from nonmagnetic gangue such as quartz. Magnetic separators can be classified into low- and high-intensity machines, which may be further classified into dry-feed and wet-feed separators When the mineral is magnetite, low- intensity ( oersteds) separation is normally practiced because it is very cheap and effective. If the particles are of comparatively large size, greater than 6 mm, dry magnetic separations are used. When the particles are less than 100 μm wet magnetic separation is used. If the size of the ore is intermediate, it is possible to use either method. Highintensity ( oersteds) separators can be used to separate weakly magnetic materials, such as hematite and hydrated hematite, from gangue materials. This process is suitable for use with dry ores. Wet highintensity magnetic separation has its greatest use in the concentration of low grade iron ores containing hematite, which frequently replaces flotation methods, Froth Flotation; Froth floatation is a selective process and can be used to achieve specific separation from complex ores. This process utilizes the differences in physicochemical surface properties of particles of various minerals. After treatment with reagents, such differences in surface properties between the minerals within the floatation pulp become apparent and, for floatation to take place, an air-bubble must be able to attach itself to a particle, and lift it to the water surface. Froth floatation can be used effectively to separate general type of iron ore to upgrade certain types of iron ore concentrates. For floatation to take place, the particles should be at least 250 μm. In order to float iron ore, anionic floatation by using fatty acids or petroleum sulfonates as collector can be applied to float fine iron oxides, such as magnetite, hematite, or siderite; away from waste minerals such as quartz or chert. Cationic floatation may be used to upgrade fine concentrate by floating the gangue minerals away from the iron minerals. The magnetic separation and flotation are the most widely accepted technologies for the concentrating of iron ore particles. 16

17 However, these processes result in iron concentrate with high amounts of very fine and/or interlocked silica particles. After all above mentioned processes Fine Iron Ore, which are produced from concentration methods used, are to be agglomerated before it can be fed into blast furnace. Fine iron ores are not suitable as feed to the blast furnace, both because fines tend to pack into a nonpermeable bed and because the fine particles are likely to be carried away as dust by the high gas flow rates. The powders are must therefore be agglomerated into larger particles that will be improve permeability of the furnace burden, increase the rate reduction, and reduce the amount of material blown out of the furnace as dust. But due to huge amount of fine concantrate available in the market either as a product of concentration process in which low quality ores are beneficated or as an output of handling process, since many years technology suppliers and mine owners tried to develope methods to use these fines in steelmaking operations with or without any further high cost agglomeration process. As can be seen at Figure 20 Ultrafine iron ore supply shows big growth. Figure 20: Growth of ultrafine supply of Iron ore 17

18 Most of the new ultra fine iron ore capacity goes to DRI production. There are numerous Technologies for DRI production in which concentrated iron ores can be used in fine form or with slight agglomeration treatments. The selection of suitable process for benefication and DRI production needs further studies in which many parameters should be evaluated and optimum solution should be reached. Main parameters in that evaluation process are; reserve capacity, type of ore, possible benefication degree, availability of energy sources, prices of these sources, water resources, distance of mines and possible plant locations to steelmaking markets, transport facilities etc. For subject iron ore reserves, same procedures should be applied, before having all related datas, nothing can be said regarding size of benefication plant, type of methods, specs of final products, possibility to use it at DRI production, the budgetary investment cost of the benefication plant and so others. All we can say at the moment is there are many alternatives and solutions in that area with different routes and cost profile, with careful and scientific ways, optimum combination can be found and implemented with profitable results. In our opinion these new methods to produce DRI by using fine ore can be applied for many Turkish iron ore reserves. It is clear that low quality iron ores had no chance to use directly in Blast Furnace feed or as an export product. Untill now all of these low quality mines could not be considered as worth to make investment for benefication due to relatively lower prices of Iron ore in the world, and high logistic cost to reach export markets. But increasing iron ore prices all over the world, improvements in DRI Technologies in which fine ore can be used, increasing demand of Turkish Steelmaking industry as an alternative raw material against conventional scrap usage and increasing requirements to use virgin iron ore to produce low residual steel qualities creates a new alternative route to local mine owners. Market developments, basic Technologies, rough cost profile, approximate investment costs and other necessary information necessary at the moment for DRI production can be given as follows. 18

19 IRON ORE DIRECT REDUCTION TECHNOLOGY; Our topic is not the route reaching to Blast Furnaces in which more than % 70 of total steel production in the world follows that way. Above mentioned happenings in the raw material market all over the world, specific raw material problems of Turkish steel makers, relatively poor quality of some Turkish iron ore reserves leads us to think to find a new way to convert that characteristics to an advantage for both iron ore mining and steelmaking sectors. That option is defined as Direct Reduced Iron. Direct Reduction is a solid state high temperature Reduction process which goes back to the beginning of last century. There are many processes for Direct Reduction depending on type of reducing agent, type of furnace, type of ore, shape of ore, type of final products, application area etc. Many process in the history of DRI were not succesfull, only few succesfull Technologies are operating. Almost % 73 of total DRI production is made through gas based operations rest is coal based. Market for gas based operations is dominated by two companies namely Midrex and HYL. Figure 21, shows the market shares of main processes. Figure 21: Market shares of major DRI Processes at the year

20 DRI REDUCTION REACTIONS ; Reduction of Iron ore by Carbon follows below given reactions. 3Fe2O3 + C 2 Fe3O4 + CO ; ΔH1 = Kcal. --- (1) Fe3O4 + 4C 3 Fe + 4CO ; ΔH2 = Kcal. --- (2) Fe + C Fe + CO ; ΔH3 = Kcal --- (3) 3Fe2O3 + CO 2Fe3O4 + CO2 ; ΔH4 = Kcal --- (4) Fe3O4 + CO 3FeO + CO2 ; ΔH5 = 8.76 Kcal (5) FeO + CO Fe + CO2 ; ΔH6 = Kcal (6) C + CO2 2CO ; ΔH7 = K cal ---- (7) Reduction of Iron ore by Carbon monoxide follows below given reactions. 3Fe2O3 +CO = 2Fe3O4+CO2 ΔH=12636 Cal (Exothermic) Fe3O4+CO =3FeO +CO2 ΔH=-8664 Cal (Endothermic) FeO+C = Fe+CO ΔH= Cal (Endothermic) Carbon & Oxygen recations are as follows 2C + O2 = 2CO (1) C + O2 = CO2 (2) Boundouard reactions 2CO + O2 = 2CO2 (3) C + CO2 = 2CO (4) Direct Reduction by gas follows below chemical reaction steps. Figure 22; Gas based DRI reactions 20

21 Figure23; World production increase of DRI by years. Figure 24 ; World regional production of DRI. DRI is a derivative of iron ore which is almost exclusively produced to use mostly in Electric Arc Furnaces, some parts is used either in Induction 21

22 Furnaces or at Integrated steel making plants. Generally DRI is used in countries having EAF based steelmaking routes but are in lack of enough scrap, and at the same time having plenty of Natural gas. Examples to these countries are Gulf countries, India, Venezuella, Iran, Egypt, Maleysia, Mexico and some others. Low natural gas or coal cost forced these countries to apply that technology eventhough some of them have no enough iron ore resources. There are many advantages of using DRI in steelmaking operations but these are not our subject at the moment. There are many quality parameters needed from iron ore to produce DRI but the most important one is of course Metalic Fe Content which should be around %. Other parameters are subject to further considerations during optimum process determinations for available iron ore sources.. What we recommend is to use relatively low quality iron ore reserves for DRI production after passing through benefication processes. Most of the quarries are located at mid Anatolia where takes long distance to reach export ports, as known very well logistic is the most important cost item in mining industry, for that reason Turkish Iron ore industry could not grow to reach export markets especially at the time when prices are too low. In the mean time new Technologies are developed to use fine concentrated iron ore together with natural gas alone or with various grades of local coals. That option could be a good alternative for the mining companies who could not export their materials and could not satisfy the quality requirements of local integrated steel plants. There is and will be tremendous demand in local market for DRI if the price and quality can be optimized. Besides well known gas based processes, there are some other process in which relatively lower capacity matching the financial power of investors can be applied. We will not go details of each processes, our target is to give an idea about some alternatives which we think suitable for our targets. One of the option is called as RHF process, in which low quality beneficated iron ores can be used to produce DRI. In further steps of that process DRI can be converted to pig iron and iron nuggets. 22

23 Figure 25 ; RHF process; The approximate investment cost for that process is around 200 Usd/ ton. In that process carbon is used as reducing agent, Natural gas, Syne gas, oil, powder coke can be used as fuel. Waste heat recovery option can be applied to recover heat in the waste gas to use own electrical energy. Different capacities are possible together with different fuel options. The second option is called as Tunnel kiln process which is mostly used in China, Typical shape of DRI is like given below; Figure 26; Tunnel kiln DRI Product ready to use at EAF. 23

24 In that technology, the investment cost is around 150 Usd /Ton. All these investment cost figures are subject to reconfirmation. Because of simple operation mode and relatively lower investment cost that option is recommendable. Iron ore concentrate feeded as fine or as shaped into the furnace in which Natural gas or coal gas can be used as heating source, fine carbon is used as reducing agent. Starting from tons/ annum up to tons/ annum different layout and capacity figures are possible in that option. Just to give an idea about size of dominant Technologies in the market, a typical Gas based tons/ annum capacity DRI plant Picture is given in figure 27. That one is called as Midrex process, typical investment cost figure is between Usd / ton. That process use Natural gas a reducing agent, and lump or pellet iron ore as feeding material. Lower Operational cost and efficiency of that process are the most attractive items, but as it needs relatively high investment cost, pellet as feeding material and natural gas as reducing agent is not recommendable for Turkish mine owners. Figure 27 ; Midrex Gas based DRI Plant 24

25 Typical cost profile of Gas based DRI production can be given as below. Figure28 ; Typical cost splits of world DRI production Common figures for cost items in various types of process can be given as below, i. Between 1,35-1,45 Ton / Ton DRI iron ore is used in different forms, ii. As an energy or reducing agent source natural gas consumption is around Nm3/ Ton DRI for gas based process. iii. Figure 29 shows typical consumption figures of gas based operations. iv. If the process is mix of coal and gas based natural gas consumption could be Nm3/ton DRI, coal consumption could be around Kg/ ton of DRI, v. Electricity consumption is around Kwh / ton DRI in gas based process and negligible in coal & gas process. vi. In Turkey natural gas price is around 33 usd cent / Nm3, anthracite price is around 165 usd /ton, electricity price is around 11 usd cent / kwh. vii. Production cost depends on type of process, iron ore cost and some other parameters, but just to give an idea about conversion cost of a typical DRI production with local Turkish prices we can easily say that out of iron ore it could be around Usd/ ton. This figure is just for indication and can not be considered as an input to any kind of feasibility study. Market price of DRI is always higher than Premium scrap prices as can be seen Figure

26 Figure 29 ; Typical gas based process consumption figures. Figure 30 ; Pricing trends for DRI & Pig Iron & No1 Bundles, 26

27 As of today the market price of DRI around 425 Usd / Ton. Figure 31, shows how MENA countries try to meet increasing demand for metallic raw material requirements. In order to give an indication about market trends concerning DRI demand that graph could be meaningful; For the countries like MENA who has no enough scrap sources for Steelmaking operations DRI is the only choice. Turkey although has certain amount of local scrap sources, DRI for sure will be the most attractive alternative especially because of quality concerns. Figure 31 ; Raw material alternatives against growing demand at MENA region : According to various sources, the slow down in economic activities of developed countries will hit the scrap recovery rate in these countries, therefore conventional exporters of scrap who were the main suppliers of Turkish steel industry will face with decline of supply and increase in pricing accordingly. Possible DRI productions in Turkey by iron ore owners may replace that free volume to the benefits of steel producers and mine owners at the same time. Below given Figure 32, shows a forecast for the period of , demand increase is much much higher than supply growth, CIS was one of 27

28 the main scrap source of Turkey since many years, other alternative scrap sources are far from to fill that gap. Figure 32 ; Scrap trade growth is getting slow down. EXECUTIVE SUMMARY; We made a short outlook to the world steel, raw material, iron ore industries, and reached some findings, based on these findings an alternative for Turkish medium size low quality iron ore mining industry, and steel industry who are in lack of reliable raw material sources can be proposed as follows. i. Depending on reserve, ore quality, benefication degree, place, available energy sources, intimacy to markets and ports an optimum material flow and benefication plant can be designed and installed. ii. If the subject mine quality can match the requirements of DRI production process after passing through above said benefication process, fine concentrate which is output of that 28

29 process can be used in various type of DRI processes to produce high priced, demanded virgin raw material for EAF based steelmaking industry of Turkey iii. Selection of benefication process and DRI production process needs further studies to find optimum solution. There are numerous Technologies and solutions in which all parameters should be evaluated. iv. It is not possible to give exact figure at the beginning concerning CAPEX and OPEX of that alternatives. v. It can be easily said that low quality ores can be converted to fine concentrate, and that concentrate can be converted to DRI to use in EAF Steel making. vi. It is for sure that profitability of that route would be considerable regardless the type and size of investment should be done. Detailed feasibility study, process to determine return of investment rate, determination of place, size, type and so others is the subject of further studies. Thank you very much for your reading. Please do not hesitate to contact with us for any further question may arise. Muammer BILGIC ECOSID Ltd