Selection of Ironmaking Technology: Principles and Risks

Abstract

Understanding and managing the risks inherent to the introduction of a new technology in the highly capital-intensive, large volume, and low-margin steel industry, is a key to effectively implementing a lasting change. New technology risk can be mitigated by recognizing the hierarchy of critical decisions that must be made, whether for a green-field project or a brown-field project that is focused on restructuring and modernizing existing facilities. This leads to a logical sequence of project planning activities starting with an evaluation of technology, its maturity/performance, and scale-up factors, selection of appropriate technologies and plant concepts, development of capital and operating costs, risk evaluation/management strategy, recruiting the best resources and management team, effective pilot and demonstration plant operations that leads to a successful commercial facility. Over the years, Hatch has developed a robust methodology for process technology selection for the iron and steel industry. In particular, this methodology has been successfully applied in the selection of alternate ironmaking technologies, many of which are in different stages of development/implementation. The methodology is based on a two-stage approach in which the first stage includes a preliminary evaluation of all available ironmaking technologies followed by short-listing of the best (maximum 3–4) candidate technologies based on results of mass and energy balance modelling, and a simple financial analysis consisting of payback period, factored capital cost and operating cost estimates as well as risk analysis. The second stage involves a more detailed analysis using refined input data, mass and energy balance, capital and operating cost estimate, as well as a detailed financial analysis of the best technologies selected. The detailed financial evaluation is based on estimation of IRR/NPV and discounted cash flow analyses. This methodology will be quite useful to the Indian iron and steel industry for their future expansion plans considering available input raw materials, fuels and reductants as well as accounting for the quality of the materials. To illustrate the critical elements of this methodology and the analysis required for the successful selection of ironmaking process technology, a case study covering the evaluation and selection of the best (most-suitable) ironmaking technologies for an Iron and Steel Company that is located in the European part of Russian Federation, is presented in this paper. In this study, the selection process considered the steel company’s access to specific input raw materials, reductants as well as fuels. The input materials considered in this analysis present a number of interesting points that are relevant for the Indian steel industry.