Merchant Pig Iron… for EAF Steel Mills and Foundries

Merchant Pig Iron… for EAF Steel Mills and Foundries
North America’s first major merchant supplier
November 7, 2015
What we know…
• Will produce pig iron in the bottom half of the global cost curve on a
delivered basis
• Will produce steel grade and/or foundry grade, including nodular
Steel Grade %
C
Si
Mn
P
S
3.5-4.5
1.5
1.5 max
0.12
0.05
Nodular “Triple5” %
C
Si
Mn
P
S
3.5-4.5
0.5
0.05
0.005
0.002 max
• Will be based in Ohio or Quebec - will deliver significant cost savings in
shipping to mills and foundries north of Ohio River
• Before formally approaching capital markets or strategic partners, up to
60% of capital cost is in place
2
Next decisions…
• Configuration to start with
• 850ktpa (requires reduction furnace)
• 425ktpa (no natural gas required)
• 425ktpa with scalability to 850ktpa
• Smaller plant could satisfy nodular market in North America and
Europe
• Western Europe is less than 7 days by water from Quebec
• Focus on Steel Mills or Foundries
• Quebec or Ohio for location of first plant
3
Final 2 Locations…
18 Port Communities Studied in Detail
QUEBEC, CANADA
• Half the cost for electricity
• Close shipping distance to Great
Lakes, eastern USA and Europe
• Year round water access
• Access to low cost iron ore
nearby
• Corporate income tax rate 15%
• Strong Government partner
OHIO, USA
• Half the cost for natural gas
• Trucking distance to mills and
foundries
• 9 months water access
• Access to low cost coal nearby
• Corporate income tax rate 35%
• Strong Corporate partner
4
Own Test Facility
Commercial Melt Tests Validating Operating Cost Model
•
•
•
•
•
Successful multi day smelting campaign completed using submerged arc furnace (“SAF”) Oct
2013
Witnessed by HATCH Engineering as part of an independent technical review for Feasibility work
Witnessed by major ferrous metal traders and potential off-take partners
Furnaces operated by extremely experiences metallurgists on staff
Low cost thermal coal used as a reductant in the manufacturing process of high value pig iron
Demonstration Facility in Forks, Pennsylvania
Photos taken during melt tests conducted in Easton, PA
5
Flow Sheet Combines Proven
Technologies
Composite Briquetting
Iron fines
Pre-reduction in RHF
Pig iron smelting
Coal
Binder
CBQ with Goose Bay Fe
• Raw material inputs are processed, mixed
and briquetted to form CBQ
• CBQ strength is derived from pressure
and binder
• CBQ will be transferred by conveyor to a
rotary hearth furnace (“RHF”)
• Heat and reducing gas in the RHF causes
pre-reduction of iron ore
• Hot DRI is transferred to an electric submerged
arc furnace (“SAF”)
• Two layers of material are created in the SAF,
iron and slag
• Iron is tapped form the furnace and cast into
pigs for sale as MPI
6
Target Market North of the Ohio River
2 potential locations – Quebec, Canada and Ohio, USA
(Blue Dots = EAF’s)
Niagara Falls
Mississippi River
Ohio River
Ohio River
Focus on the U.S. steel industry north of the Ohio River
7
Supply & Demand of MPI
N.A. Pig Iron imports by Destination
N.A. Pig Iron Imports by Country of Origin
6.3%
14.8%
32.2%
Brazil
Russia
Ukraine
Other
46.7%
EAF Consumption of merchant pig iron
8
mtpa
6
4
2
0
2003
2004
Source: CRU & IIMA
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
As of November 2014 imports were 4.3mt according to data from the IIMA and CRU.
Demand has rebounded since 2009 and is moving back towards 5.0mtpa
8
Captive Iron Ore Resource – Eastern Canada
At Surface Labrador Ironsands – Target Cost <C$30/tonne for Concentrate
•
•
•
•
•
•
•
No blasting, No Crushing, No Grinding.
Magnetite & Titanomagnetite alluvial sands
At surface earth moving operation
Low cost (spirals + magnetic separation)
Environmentally benign - low remediation costs
Low Cost Hydro Electricity – Adjacent to Hydro Generation
Nearby Seaport - Full service community - existing labour
9
Logistical Competitive Advantages
Transportation Cost MPI to USA ($/tonne)
Brazil
Russia
Ohio
Quebec
Freight
to Port
$35
$22
$0
0
Port to
NOLA
$15
$23
NA
NA
To
Midwest
$25
$25
$10
$20
Raw Material Consumables
•
•
•
•
Iron ore concentrate – 1.6mpta
Reductant – 650ktpa
Lime – 150ktpa
Binder – c. 60ktpa
Outputs
TOTAL
$75
$70
$10
$20
• Merchant pig iron – 900-1,000ktpa
• Slag – 235ktpa
A plant based in Ohio or Quebec will have a significant cost advantage over imported material. In
particular, it will avoid the significant costs of material movement from New Orleans to the Midwest
10
Positive Demand Factors for MPI
o
o
o
Growth in global EAF steel production (4.8% CAGR
for 2013-2015) especially in flat rolled steel and
special grade steel (both require MPI) based on
CRU estimates
Global scrap supplies are deteriorating in quality
accumulating hard to remove impurities with each
recycling period. MPI needed to dilute these
impurities
New Russian, Asian & Middle Eastern EAF’s to
draw Russian and Ukrainian MPI from North
American market
Recent EAF Projects
Global EAF Steel Production
Big River Steel may increase U.S. AIU demand by 400-500ktpa
11
The Future
US$300 million Pig Iron Plant
◦ BFS Fulfilled by May 2016
◦ Permitting initiated December 2015
◦ Secure Capital, raw material supply and off-take 1H 2016
Labrador
◦ Continue to advance the mineral sands of Labrador – smaller operating foot print of 10 mpta
of sands
◦ Focus on garnets and feldspars
◦ Work with community on port infrastructure
◦ Revisit an iron making plant after power supply has been stabilized and certainty on pricing
Forks, PA
◦ Commercialize furnaces – e-scrap and other products that can be smelted
Newfoundland and Labrador
◦ Target projects that have a product to be smelted, as well as early stage opportunities (with
a reasonable amount of drilling and definition0
◦ Partner with opportunities that may be able to use our tools – GeoProbe’s for drilling in
unconsolidated materials; magnetometer/gradiometer and XRF Gun
12