Kobe Steel Plans New Plant in India with Technology Piloted by Steel Dynamics

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Researched by Industrial Info Resources (Sugar Land, Texas). Kobe Steel, Japan’s fourth largest steel maker, is planning to invest $165 million into the construction of a steel plant in India in a joint venture with the Chowgule Group (Goa, India). Kobe expects to start building the plant by the end of this year. The Japanese company is also keeping options open on the licensing of its ‘ITmk3’ production technology direct to the Indian company.

The technology enables production of high grade steal from cheaper grades of iron ore and coal. The 500,000 tons per annum (tpa) plant will produce iron nuggets from iron ore fines. The nuggets can be used as a raw material in electric arc furnaces to make steel.

The ITmk3 technology provides a flexible and environmentally friendly process for producing high purity iron product. In the process iron ore fines and pulverized coal are formed into solid ‘green’ pellets. The pellets are fed into a rotary hearth furnace and heated to 1,300-1,450° C. The pellets are reduced and melted enabling the iron to cleanly separate from the slag. The process takes only about 10 minutes. Capital investments are low as coke ovens and sintering plants are unnecessary. Costs are also reduced as no FeO (ferrous oxide) remains when the pellet melts and refractory erosion in the rotary hearth is prevented. The process produces 20% less CO2 than blast furnace operations.

Kobe, which is currently running a pilot plant in Minnesota to test the process, said that Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) is likely to become the first licensee for the process in the near future. In March, Steel Dynamics announced its participation with Kobe Steel in a project to construct and operate a $235 million iron-making facility in the Hoyt Lakes region of Minnesota. The initial production module is designed to have a production capacity of 500,000 tpa of iron nuggets and will use the ITmk3 technology. The progress of the project is contingent on the successful completion of a range of issues including finance, supply of iron concentrate and land options.

The Japanese company has been holding talks with a number of U.S. steelmakers on the construction of commercial scale plants using the technology. Interest in the technology is also coming from coal-rich countries like Australia and Brazil in addition to India.

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