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1 22 nd January 2003 Port Kembla Steelworks & Springhill Analyst Site Visit Noel Cornish Chief Executive Australian & New Zealand Steel Manufacturing Businesses File Reference: u:\guidelines - BlueScope Lysaght PowerPoint Template May 2011

2 Important Notice THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BSL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR. TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL LIMITED AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FOR ANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS. 1

3 Introduction 2

4 Current Structure - Single point of focus for Australian & New Zealand Steel Manufacturing Businesses Managing Director and CEO Paul O Malley Legal (Michael Barron) CFO (Charlie Elias) People and Organisation Performance (Ian Cummin) Aus/NZ Steel Manufacturing Businesses Australian Coated and Industrial Markets Australian Distribution and Solutions North America Asia China Noel Cornish Paul O Keefe Keith Mitchelhill Mark Vassella Sanjay Dayal Bob Moore Oversees all manufacturing facilities in Aus/NZ; responsible for driving safety, process excellence and meeting production schedule at lowest cost PKSW Springhill Western Port Western Sydney Acacia Ridge Glenbrook NZ 3

5 Current Australian & New Zealand Steel Manufacturing Businesses Noel Cornish Chief Executive ANZSMB Sharon Wingate Personal Assistant Oscar Gregory General Manager Iron & Slab Gabe Meena General Manager Mills & Coating Simon Linge President New Zealand Steel & Pacific Islands Aimee Allen General Manager Western Port Lawrence McDonald General Manager Finance John Nowlan General Manager Eng g, Manufacturing & Environment Barb Bridger General Manager People & Org Performance Ross Murray General Manager Strategy 4

6 New BlueScope Australia & New Zealand ( BANZ ) Structure Aligned and Market Focused Australian & New Zealand Steel Businesses Managing Director and CEO Paul O Malley Legal (Michael Barron) CFO (Charlie Elias) People and Organisation Performance (Ian Cummin) Global Building & Construction Markets BlueScope Australia and New Zealand North America Asean China Pat Finan Mark Vassella Keith Mitchelhill Sanjay Dayal Bob Moore Single organisation serving the markets of Australia and New Zealand, including all significant operational facilities: PKSW Springhill Western Port Western Sydney Acacia Ridge Glenbrook NZ Distribution ib ti Lysaght 5

7 New BANZ Structure Aligned and Market Focused Australian & New Zealand Steel Organisation 6

8 Changes to BlueScope Australia & New Zealand Business The recently announced changes to the Australasian business are intended to: Deliver an improved sales and marketing effort and better integrated customer service, with a key focus to compete against imported steel Integrate business support functions This initiative will not require any changes to external reporting segments 7

9 Agenda Safety Water conservation Community Markets Port Kembla Steelworks Process and Production Costs and Raw materials Major Investments Coated Businesses Process and production Summary 8

10 Safety, Water Conservation, Community & Markets 9

11 Safety ANZSMB Illawarra Lost Time Injury Frequency Rate Medically Treated Injury Frequency Rate YTD YTD 2011 Fiscal years Fiscal years 10

12 Environment Continued Improvement in Water Conservation Port Kembla Steelworks World class water efficiency for an integrated steelworks 26,500 ML of recycled water used since Oct 2006 Recycled water is >50% of total fresh water inputs Options being investigated t for further reductions. Springhill Works Fresh water input is >50% recycled water Hot Strip Mill run out table uses recycled water Federal Government s proposed Carbon Tax Scheme will be reviewed after this presentation 11

13 Community Engagement Policy of supporting education, youth, arts and culture, community welfare Active participation in a variety of community initiatives and committees $500,000 in sponsorships, supporting 30+ Illawarra organisations $80,000 in donations towards charities, schools, sport, employees and their families 12

14 Markets and Supply Chain Western Port Building & Construction Illawarra Direct Domestic Export Distribution & Solutions Australia Manufacturing Distributors Pipe & Tube 13

15 Port Kembla Steelworks 14

16 Port Kembla Steelworks Overview Fully integrated plant with steel making capacity of 5.3Mtpa. Situated on 760 hectares and employing 3,100 permanent employees (plus 1,000-1,500 contractors on any given day). Excellent technical and operational skills and experience. Focus on: - Safety - Productivity - Customers - Quality - Environment - Costs - Community - Flexibility 15

17 PKSW Overview of Steel Production Process SINTERING BLAST FURNACE Iron Ore Coal Slag Sintered ore Molten pig iron Coke COKE OVEN CONVERTER (BOS) Graded Liquid Steel REFINING STAND CONTINUOUS CASTING Slab ROLLING MILL REHEAT FURNACE FLAT PRODUCTS Hot Rolled Coils Slab Hot rolled strip mill Cold rolled strip mill Electrical coil Wide coil Narrow strip Cut lengths Metal Coated coil Painted coil Laminated coil Reversing mill Plate Tubes Welded tube mill 16

18 PKSW Production & Despatch Flow Port Kembla Steelworks Slab Production 1H H ,643 2,187 Slab Domestic 0 0 Export Inventory movements & yield losses Interco Western Port (2) Port Kembla Steelworks Despatches (1) 1H H ,494 2,081 Hot Strip Mill HRC 1,448 1,112 Domestic 213 (3) 256 Export 467 (4) 154 Interco Domestic Export Springhill (5) / Distribution Asia / Nth Am (6) Legend: Product / Dest 1H 11 kt 1H 10 kt Plate Mill Plate Domestic Export Interco Domestic Notes: (1) Slab, HRC and plate. Variances of totals from sum of constituents is due to rounding. (2) See Coated Australia Annual Capacities slide for Western Port Works capacities. (3) Domestic HRC ex Port Kembla Steelworks only; ie excludes domestic HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1. (4) Export HRC ex Port Kembla Steelworks only; ie excludes export HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1. (5) See Coated Australia Annual Capacities slide for Springhill Works capacities. (6) See ASX Release, Attachment 1 for detail. Distribution 17

19 PKSW Major Investments Commissioning Project Capex (A$m) 1996 No. 6 Blast Furnace mtpa Project Coke Side Emission Control Sinter Plant Emission Hot Strip Mill Expansion No. 5 BF Reline Sinter Plant Upgrade Project Steam Asset Upgrade Project Steel Injection Station 36 18

20 PKSW Major Investments No. 5 Blast Furnace Built in 1972, relined in 1978, 1991 and 2009; capacity approximately 2.6Mtpa of hot metal Reline undertaken from 18 Jan to 19 Aug 2009 Restarted on 19 August 2009 and has operated continuously since blow-in No. 3 Sinter Machine Built in 1975, revamped in 2009; capacity approximately 6.6Mtpa of sinter Refurbishment undertaken from May to June 2009 Scope of work included new strand feeder and ignition furnace, longer strand, wider cooler, cooler fan upgrade, electrostatic precipitators upgrade Restarted 29 June 2009 Steam Asset Upgrade Project Commenced April 2009, expected completion August 2011 Scope is to upgrade steam generation assets, comprising two new natural gas fired package boilers, upgrade of boiler control systems and a new water treatment plant Ensures a secure supply of steam (energy) for 5-10 years, deferring the steam security scope of the Steelworks Cogeneration Project Steel Injection Station Project Commenced April 2010, expected completion December 2011 Scope is to install new steel injection facilities, replacing equipment installed in 1980 The project will enable incremental steel production growth and increased capability for production of special steels 19

21 PKSW Cost Profile Total cost A$m Raw Materials Desp & Freight Conv Costs S&A FY2006 FY2007 FY2008 FY2009 FY2010 Notes: (1) Chart shows cost of despatches. (2) Conversion costs include depreciation. (3) Raw material includes iron ore, coal, scrap and alloys but not scrap purchased on behalf of OneSteel. 1H FY

22 PKSW Consumption of Primary Raw Materials Volume consumed in production (dry mt) Indicative use rate FY2008 FY2009 FY2010 1H FY11 per slab tonne Iron Ore Fines t Lump t Pellets t Total t Coal Coking (1) Includes around 300kt t PCI consumed t for export Anthracite coke t02t Total despatches t Scrap (3) t (2) Reflects mix shift from sinter plant upgrade (+1.1mtpa fines, -1.0mtpa pellets) Possible slight shift towards higher PCI use in future in lieu of hard coking coal Raw Steel Production Export Coke Despatches 264kt 282kt 175kt 89kt Note: (1) coking coal volumes shown are dry tonnes; market pricing is typically for wet tonnes, 8% moisture content difference to dry tonnes. (2) measure shows tonnage rate used in steel making, and excludes coal used for export coke making. (3) 40% of scrap feed is sourced externally; balance, internally sourced scrap. 21

23 PKSW Productivity 6,000 Productivity (tonnes per person per year) Employees 1,800 5,500 1,600 5,000 4,705 4, ,400 4,049 4,000 3,783 1,200 3,662 3,610 3,567 3,500 3,406 3, ,171 3,087 3,107 1,000 3,000 2, , , , Product ivity (Crude Ste eel Output, Ton nnes/employee e/year) 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09* FY10 FY11^ 0 Notes: * 2009 employees includes 69 transfers in (principally manufacturing process research) due to internal restructure ^ Based on 1H FY2011 annualised production 22

24 Springhill Coated Products 23

25 Springhill Coated Products Springhill s Coupled Pickle Cold Mill 990kt Metal Coating Lines (3 lines) 825kt Springhill Paint Line 200kt 24

26 Coated Australia Annual Capacities Western Port Slab Hot Strip Mill 1,400 Pickle Line 1,100 Cold Mill 1,000 HRC HRC CRC Port Kembla Steelworks HRC Metal Coating Lines 830 Paint Lines 330 Metal Coated Strip Painted Strip Springhill Coupled Pickled Cold Mill 990 Metal Coating Lines 825 Note: Numbers reflect mill capacity in kilotonnes. * There is an additional 215ktpa of combined capacity at Western Sydney and Acacia Ridge (Qld) paint lines. Paint Lines 200* CRC Metal Coated Strip Painted Strip 25

27 Summary 26

28 Summary Continued focus on safety, community and environment Continued focus on cost reduction initiatives Responding to meet market demands 27

29 Q & A s 28

30 Supporting Information 29

31 Cokemaking 30

32 Cokemaking Process Overview 3.0Mtpa BLENDED COAL GAS PROCESSING SULPHATE TAR BTX (Benzene) 39Kt 86Kt 23ML 1 tonne of coke solids is equivalent to 1.30t coking coal Export coke BlueScope approach is to sell excess production on a spot basis. Generally offered in 30-45kt cargo sizes. 175kt of coke sales in FY2010 COKE PLANT 2.3Mtpa COKE SOLIDS COKE OVENS GAS 19,000TJ COKE SCREEN 5% BREEZE (< 10 mm) 7% 2% NUT (10 25 mm) TATA (20 50 mm) 86% LUMP (25 80 mm) Interworks energy (boilers, furnaces) Types of coke solids produced Lump Tata Nut Breeze Typical yearly Coke usage (reflective of FY 2008) Blast furnaces 1.9Mtpa Sinter plant 0.2Mtpa Export 02Mtpa 0.2Mtpa 2.3Mtpa 31

33 Ore Preparation Sinter and Raw Materials Handling No.3 Sinter Machine Built 1975 Revamped 2009 Grate Area 480 m 2 Production 6.6 Mtpa Productivity t/m 2 /d BF Burden ~60-70% 32

34 What is Sinter? PELLETS FINE ORES Blended and Fluxed in Sinter Machine to Produce Sinter LUMP ORES Pellets Sinter Lump PREPARED BURDENS BLAST FURNACE 33

35 Blast furnace Ironmaking Process Raw materials, Lump Ore, Sinter, Pellets, Coke & fluxes Charged Through top of furnace Layers of Coke & Ferrous Materials descend over 8 hrs to bottom of furnace soften then melt and collect in the hearth 100 o C Excess Hot gases flow from top of Furnace to Gas Cleaning Plant and reused for heating Cast Iron / Copper Stave Cooling system Molten Iron drained from taphole in side of furnace into brick lined torpedo shaped vessels. Hot Air (including additional Oxygen) i+ PCI s blown into Furnace through Tuyeres. Temp = 1200 Deg C Pressure =370 Kpa Velocity = 230 m/sec Slag converted to either sandlike particles in a Granulator or p g rock slag when cooled in pits 1500 o C 2200 o C Carbon Refractory Lining 34

36 Ironmaking Blast Furnaces No.5 Blast Furnace No.6 Blast Furnace No.5BF No.6BF Built Relined 1978, 1991, Campaign Life yrs >20yrs Output 2.6 Mtpa 2.6 Mtpa 35

37 Steelmaking Process Basic Oxygen Steelmaking (BOS) Molten iron (250t) Scrap steel (approx 60t) Oxygen blowing * Annual Scrap Usage (indicative) 1mtpa (approximately 40% sourced externally) Refractory lined BOS furnaces 3 x 280t 36

38 Slabmaking Process Steel ladle Revolving turret Steel ladle Tundish Continuous Slab Casters 5.3 Mtpa Mould Max. width = 2200mm Max. length = 12.5m Max. thickness = 300mm To cut-to-length Hot Strip Mill, Plate Mill, Westernport or export 37

39 Slabmaking No.1 No.2 No.3 BOS Caster Mtpa total output 38

40 HRC Process Hot Strip Mill Commissioned 1955, upgrades 1972, & Product flow Mtpa Slabs ex Slab Casters Reheated to 1225 C Dual reheat furnaces Roughing- g Reversing Mill300mm 25mm Coil box Six Stand Finishing Mill min. gauge 1.48mm 39

41 Hot Strip Mill Built 1955 Major upgrades 1972, 1980, 1987, 1993, nd Walking Beam Furnace 2006 Capacity 2.9 Mtpa 40

42 Plate Process 450ktpa capacity Commissioned mm- 180mm thick x 1200mm- 3400mm wide Slabs ex Slab Caster Reheat Furnaces Finishing Mill Roughing Mill Hot leveller Descaling Box Shearing, stencilling, shot blasting, prime painting & inspection Product flow 41

43 Plate Mill No1 Furnace & Stand 1 Rolling Mill 1963 No2 Furnace & No2 Stand Rolling Mill 1971 Capacity 450,000t 42

44 PKSW Despatches by Half Year 2,609 2,599 2,611 2,555 2,494 BSL internal* 1,361 1,295 2,118 2, ,606 1, ,322 1,411 1,348 1,203 Export external Domestic external Jun-2007 Dec-2007 Jun-2008 Dec-2008 Jun-2009 Dec-2009 Jun Dec % exported, with geographic sales split being: Asia 100% Other 0% External Product Sales Mix Slab 30% 36% 30% 23% 22% 43% 28% 30% HRC 54% 51% 54% 57% 66% 47% 60% 58% Plate/Other 16% 13% 16% 20% 12% 10% 12% 12% Asia 41% Note: *Internal Customers include both domestic and export despatches 31% sold domestically and 69% exported, with geographic split being: Europe 29% Americas 13% Other 17%

45 Springhill Cold Rolling COUPLED PICKLE COLD MILL Coupled Pickle Cold Mill Thickness reduction via cold rolling through five stands Recoiling using carousel reel Technical Capabilities CPCM Thick mm Width mm Hot rolled coil is uncoiled Scale removal (pickling) using hydrochloric acid To Metal Coating or Pack & Despatch Process: Hot rolled coil is pickled in hydrochloric acid to remove iron oxide to prepare the strip for cold rolling. Cold rolling reduces steel thickness by passing the hot rolled pickled strip through a series of five rolling stands. High roll force and strip tension allows the strip to be progressively reduced at each stand without t changing the width. The CPCM is a continuous o pickling operation coupled to the cold reduction process. Output: Sold as cold reduced uncoated steel, or sent to metal coating lines for further processing. Capacity: 990 kt/a 44

46 Springhill Metal Coating METAL COATING LINES Pre-Heat Ovens Natural Gas Fired Selas Furnace Horizontal Cooling Baths Cooling Tower Skin Pass Mill Technical Capabilities MCL1 Thick mm Width mm MCL2 Thick mm Width mm MCL3 Thick mm Width mm Tension Leveller Passivation System Zincalume or Galvanized coil Cold rolled coil is uncoiled Metal Bath & Premelt Pot Process: Cold reduced coils are hot dipped coated with ZINCALUME coating (Nos 1 & 3 Lines) or galvanised (zinc) coating (No 2 & 3 Lines) to provide corrosion protection Output: Sold as ZINCALUME coil or galvanised coil to building and manufacturing industries or processed further by our Paint Lines. ZINCALUME, ZINCSEAL, ZINCANNEAL, GALVASPAN Capacity: 825 kt/a Resin Coaters To Painting or Pack & Despatch 45

47 Springhill Painting and Finishing Automatic Guided Vehicles PACK & DESPATCH PAINTING Primer Ovens Primer Coater Main Oven Main Coater Inspect & Test Labelling Strapping Protective Packaging Plastic Wrap Finished Coils Painted coil is recoiled Chemical rinsing, cleaning & pre-treatment Coated Coil from Metal Coating Li Process: Uncoated or metal coated strip is thoroughly hl cleaned and Lines chemically treated to provide best surface to apply a primer coat followed by a finish coat of paint, via roller application, which is then oven cured. Output: Building, packaging and manufacturing markets Capacity: 200 kt/a COLORBOND, AQUAPLATE Technical Capabilities No.3 Paintline - Thick mm Width mm 46

48 Springhill Site History 1939 John Lysaght (Australia) Springhill Works begins full operation stand continuous Cold Rolling Mill commissioned 1968 Cold Rolling Mill upgraded to 5 stands 1961 First continuous galvanising line commissioned 1964 Second continuous galvanising line commissioned 1966 Third continuous galvanising line commissioned 1970 BHP acquires 50% of Lysaght s 1976 MCL1 converted to Zinc/Aluminium galvanising No.3 Paint Line commissioned 1979 BHP acquires 100% of Lysaght s 1989 New pickle line coupled to 5 stand Cold Rolling Mill (CPCM) 1994 Decommissioning of Electrolytic Cleaning and Galvanising Line facilities 1996 CPCM Carousel Recoiler and Entry Accumulator upgrade Integrated Coil Packaging and Handling Project 2000 Closure of Batch Coil Annealing and Temper Rolling facilities 2002 Transfer of the Slit Recoil Line to Acacia Ridge Brownfield capacity increases 2005 Packaging Products site integrated under Springhill management as Illawarra Coated Products 2007 Packaging Products Tinplate & Finishing department closed 2008 Closure of CRM 2009 Closure of Packaging Cold Mill 47

49 Springhill Environment Springhill site is a zero process water discharge site all process water is treated through waste water treatment and returned to Sydney Water for recycling. only stormwater is received into the local environment. Recertified to ISO April Current DECCW site licenses. Reviewed environmental improvement plan ( ) DECCW recognition for make safe activities tin plating and finishing, considered benchmark Greenhouse gas targets are being established via benchmarking exercise. Water and energy intensity targets established. Achieving better than target on electricity energy intensity. Water use and intensity it continues to track at record lows. Promote BlueScope Water products with installation of several 2 thousand litre rain water tanks. Continue to recycle 100% of by-product steel, solvent, HCL, with rags, gloves and oil 48

50 22 nd January 2003 Port Kembla Steelworks & Springhill Analyst Site Visit Noel Cornish Chief Executive Australian & New Zealand Steel Manufacturing Businesses File Reference: u:\guidelines - BlueScope Lysaght PowerPoint Template May 2011