Magnetite A Higher Grade Blast Furnace Feed and its Potential Benefits for the Ironmaker Andre Mouton Principal Consultant, Pyromet Consulting Pty Ltd Kris Edwards Consulting Process Engineer
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Magnetite Resources Increasingly Important in the World of Iron Ore Hematite tends to be favourite blast furnace feed in Japan and East Asia Magnetite concentrates have been utilised extensively in Chinese, North American and Russian steel industries Appetite of Chinese steel producers for magnetite has led to recent major investments in Western Australian magnetite resources This seems to be driven at least in part by declining local Chinese magnetite ore quality and the high cost of local mines
Magnetite Resources Increasingly Important in the World of Iron Ore This work explores the merit of magnetite resource development from the perspective of a Chinese steelmaker by evaluating the Generally lower in situ grade of magnetite ores; Magnetite ore s favourable upgrade characteristics; The Capex and Opex of magnetite projects for production of blast furnace (BF) and direct reduction (DR) grades; The cost benefit to the blast furnace and how this translates to the value of Australian magnetite to integrated steelmaking; The relative CO 2 emissions associated with magnetite ore vs hematite
Techno-economics of Magnetite vs Hematite for Ironmaking The production of magnetite concentrate is more expensive than hematite Hence, magnetite has been generally overlooked as a viable ironmaking feedstock except where a necessity when no good local hematite available, e.g. China The techno-economics of magnetite was evaluated using GHD s proprietary OREX iron ore Value-in-Use (VIU) model.
OREX Value-in-Use Model OREX was developed over a number of years as a tool for estimating the value of iron ore products Estimates the actual value of ore to the integrated steelmaker for all product types: Direct charge lump or pellets Sinter fines or concentrate Consists of a series of integrated techno-economic models for each process in integrated steelmaking Utilising this unique modelling tool we can demonstrate the advantages of magnetite in a holistic sense
OREX Value-in-Use Model Covers the entire integrated steelmaking production chain from sintering / pelletising through to hot rolled coil (HRC) OREX is able to calculate the full economic benefit for increased production levels in the blast furnace when a significant proportion of the burden consists of pellets Invaluable tool to determine mark-up or discount of iron ore products
OREX Value-in-Use Model
Magnetite vs Hematite Ores Magnetite DSO In situ Fe <40% >58% Beneficiation Can upgrade to >68% Fe Limited Product size <100µm Fines <10mm Lump 8 to 31.5mm Mass recovery 30 to 40% ~100% Strip ratio ~0.5 : 1 ~4.5 : 1 (waste to ore) Waste to product ~4.5 : 1
Magnetite vs Hematite Ores Magnetite concentrate can be used as sinter feed to limited extent Greatest benefit derived when agglomerated as pellets DSO lump becoming less available newest projects accept they can produce only fines DSO product quality is declining lower Fe, higher gangue, P, S and LOI (goethitic style ores)
Magnetite Concentrate Project 14 Mtpa Western Australian project, two potential products: Fe SiO 2 Al 2 O 3 P S CaO MgO BF Concentrate 67.7 4.6 0.100 0.010 0.020 0.07 0.28 DR Concentrate 71.1 1.6 0.030 0.005 0.051 0.09 0.09 Mass recovery 35% (BF grade); 31% (DR grade) Long distance slurry pipeline, filtration and transhipment Capital cost estimates: US$ 3.1B (BF grade) US$ 3.5B (DR grade)
Magnetite Concentrate Project Operating cost estimates: $100 $90 $80 Total $81 FOB Total $86 FOB Operating Cost (US$/t) $70 $60 $50 $40 $30 $20 $36 $4 $3 $28 $36 $4 $3 $31 Fixed Costs ** Indirects Transport, Shiploading Beneficiation* Crushing Mining $10 $0 $3 $3 $8 $9 BF Concentrate DR Concentrate * Highly dependent on power cost; ** Incl. royalties, capital repayment
Benefits of Magnetite Pellets in Integrated Steelmaking Four scenarios were compared based on best practice Chinese steelmaking conditions: Base case Future increase in Australian new generation DSO @ 58.5% Fe 100% pellet burden BF pellets DR pellets Scenarios compared on hot rolled coil basis at Dec 2014 prevailing prices
Benefits of Magnetite Pellets in Integrated Steelmaking Base case assumptions: Tier 1 Chinese integrated steel mill Medium sized BF s (c. 2850m 3 working volume) Productivity 2.3 t/m 3 /d Sinter ore blend consists of Chinese magnetite concentrate 15%; Australian DSO fines 48% Brazilian fines 15% Balance lump screenouts & return fines
Benefits of Magnetite Pellets in Integrated Steelmaking Base case assumptions: Blast furnace ferrous burden: Sinter 74% Australian lump 16% South American pellets 14%
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling assumptions Australian DSO: Future sinter blends will increasingly feature new generation Australian DSO ores with Decreasing Fe Increasing SiO 2, Al 2 O 3, P Fe SiO 2 Al 2 O 3 P S CaO MgO LOI Australian 58.5% Fe DSO Fines 58.5 5.0 2.50 0.100 0.030 0.15 0.15 8.0 Modelled at 200kg/t sinter / approx. 21% of sinter ferrous feed Limited availability of Chinese concentrates and South American ores
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling assumptions 100% pellet burden: Pellets only apart from small amount of recycled material OREX calibrated against published data for SSAB Tunnplåt No 3 BF Pellets fluxed to: 1.5% MgO CaO/SiO 2 = 1.0 Fe SiO 2 Al 2 O 3 P S CaO MgO BF Pellet 61.8 4.8 0.30 0.010 0 4.8 1.5 DR Pellet 65.7 2.2 0.22 0.005 0 2.2 1.5
Benefits of Magnetite Pellets in Integrated Steelmaking Financial modelling assumptions: 30% equity Interest rate 12% Discount rate 10% 10 year capital repayment
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling results increased Australian 58.5% Fe DSO Sinter quality will deteriorate with lower Fe, higher Al 2 O 3 and P 57.0 % Fe 56.8 Fe 56.6 2.10 Base Case Increased 58.5%Fe DSO 0.15 %Al 2 O 3 1.90 0.10 %P Sinter Al2O3 Sinter P 1.70 Base Case Increased 58.5%Fe DSO 0.05 Hot metal P
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling results 100% Pellet burden Pellet burden leads to significantly lower BF fuel rate and slag volumes Coke, PCI kg/thm 550 500 450 Hot metal quality improves due to much lower P 0.150 Base Case Increased 58.5% DSO BF Pellets DR Pellets 300 250 200 150 100 Slag kg/thm Coke + PCI Slag rate %P 0.100 0.050 HM %P 0.000 Base Case Increased 58.5% DSO BF Pellets DR Pellets
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling results 100% Pellet burden Decreased fuel and slag rates potentially leads to increased BF productivity Productivity t/m 3 /d 2.6 2.4 2.2 Base Case Increased 58.5% DSO BF Pellets DR Pellets BF Productivity Higher productivity, if achieved and fully utilised, can add significant value for the steelmaker Low P in hot metal opens door for production of high value steel products
Benefits of Magnetite Pellets in Integrated Steelmaking Modelling results CO 2 emissions Optimised practice with a 100% pellet burden can lead to significant reduction in CO 2 emissions
Potential Value of Magnetite Concentrate Effect of higher HRC production included (@ prevailing China ex works HRC price Dec 2014) 250 200 Concentrate Value (US$/t cfr) 150 100 50 DR Concentrate BF Concentrate DR Concentrate (Incl CO2) BF Concentrate (Incl CO2) 0 50 70 90 110 130 150 170 62% Fe Fines Reference Price (US$/t CFR)
Conclusions Magnetite pellets hold significant benefits for the Chinese steelmaker: Higher Fe content, lower gangue and P; Lower fuel and slag rates, lower hot metal P; Potential for increased BF productivity; increased final product output; Improved hot metal quality and potential for production of more lucrative high end steel grades; Smaller environmental footprint with reduced CO 2 emissions potentially up to 20%.
Conclusions For the magnetite plants considered, the minimum transfer price was calculated for breakeven NPV: BF concentrate US$ 82/t FOB / $90/t CFR DR concentrate US$ 90/t FOB / $98/t CFR The equivalent long term 62%Fe fines reference price to sustain a breakeven NPV for the projects are: US$78/t CFR (BF concentrate) US$68/t CFR (DR concentrate) Including CO 2 pricing would provide additional incentive for magnetite project development
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