coal & steel report - home of world coal association · pdf fileglobal steel production is...

32
COAL & STEEL WORLD COAL INSTITUTE

Upload: trananh

Post on 30-Mar-2018

215 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

COAL & STEEL

WORLD COAL INSTITUTE

Page 2: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Global steel production is reliant on coal. Coal is adirect input in the production of steel – almost70% of the steel produced today uses coal. Theremainder is produced using electricity – oftengenerated using affordable and reliable coal.

Steel is a fundamental material for modern life.The manufacture of steels ultimately delivers thegoods and services that growing economiesdemand – healthcare, telecommunications,improved agricultural practices, better transportnetworks, clean water and access to reliable andaffordable energy. Steel is a vital building block fordevelopment – facilitating economic growth andpoverty alleviation.

In Coal & Steel, the World Coal Institute providesan overview of coal’s role in the iron and steelsector. The report looks at the demand and supplyof coal and steel, the importance of steel to ourdaily lives, describes manufacturing processes andconsiders options to reduce environmentalimpacts, including carbon capture and storage.

Key Messages>> Metallurgical coal, also referred to as coking

coal, is a vital ingredient in the steel makingprocess. Steel is a man-made alloy of ironand carbon – carbon is found in coal.

>> Coal is abundant, affordable andgeographically well-distributed. Majordeveloped and developing economies areable to utilise large indigenous coal reserves,while coal is also available from a widevariety of sources in a well-suppliedworldwide market.

>> Steel is essential to modern societies: foodproduction and preparation; water collection,purification and delivery; healthcare;transport systems – cars, trains and ships;and modern communication systems alldepend on steel.

>> Strong population growth and rapidurbanisation is driving demand for steel – ascities develop, housing, water and electricityare urgently required and transport andcommunication links have to expand.

>> Steel is critical in the energy sector – it isused for fuel exploration, production,electricity generation and various forms ofsupply infrastructure.

>> Major efficiency gains have been achieved inthe integrated iron and steel sector. Severalinnovative solutions are being developed tofurther reduce, manage and controlemissions from the process.

>> Carbon capture and storage used directly inthe process, as well as at the power stationsgenerating electricity for electric arcfurnaces, could reduce sector emissions tothe atmosphere to near zero.

COAL & STEEL

Page 3: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 1

3 SECTION 1 COAL & STEEL3 Increasing Demand for Steel4 What is Steel?

7 SECTION 2 GLOBAL COAL & STEEL MARKET7 Coking Coal Demand & Supply8 Coking Coal Trade9 Steel Production9 Steel Demand & Trade11 Consolidation in the Iron & Steel Sector12 Case Study: China

15 SECTION 3 STEEL & SOCIETY15 Buildings & Construction16 Energy Systems16 Health, Nutrition & Housing17 Transport Systems17 Communication

19 SECTION 4 STEEL & THE ENVIRONMENT19 Carbon Capture & Storage19 New Processes20 Increased Steel Recycling

23 ANNEX FROM COKE MAKING TO STEEL MAKING23 Raw Materials23 Coke Making24 Pulverised Coal Injection24 Iron Making – Blast Furnace24 Iron Making – Direct Reduction of Iron26 Steel Making – Basic Oxygen Furnace26 Steel Making – Electric Arc Furnace

27 FURTHER READING

29 WORLD COAL INSTITUTE

Contents

Page 4: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Steel is a universal building material due to its strength,durability, versatility and affordability.Photo courtesy of Newscast/Corus

2 World Coal Institute

Page 5: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2006

0

200

400

600

800

1000

1200

1400

Steel is a vital building block for development– it facilitates economic growth and povertyalleviation and is a major element in improvingquality of life.

Coal is an essential input in the production ofsteel. Steel is a man-made alloy of iron and carbon– and that carbon usually comes from coal. Almost70% of the steel produced today relies directly onmetallurgical coal, also referred to as coking coal.The remainder is produced by recycling scrapsteel (itself originally produced directly using coal)using electricity – often generated usingaffordable and reliable steam coal.

Increasing Demand for SteelOver the last 35 years steel productionworldwide has almost doubled, from less than600 million tonnes (Mt) in 1970 to around 1.2billion tonnes in 2006. The period 2000-2006has seen unprecedented growth, with globalfigures rising over 47%.

Coal & Steel 3

Much of the demand for steel is being driven by thestrong and rapid economic growth of China andIndia. In 2006, economic growth rates in thosecountries were 11% and 9% respectively. With apopulation of over 1 billion in India, and almost 1.3billion in China, the demand for products andservices has fuelled an almost insatiable demandfor steel. China and India together consumed over445Mt of steel in 2006, around 40% of totalglobal crude steel consumption. This is set tocontinue as India is projected to eclipse China inpopulation size by 2025 and the two countries willaccount for around 36% of the global population.

Rapid urbanisation worldwide is driving demandstill further – as cities grow, housing, water andelectricity are urgently required. Transport linksmust be expanded to meet the geographicalgrowth of urban and peri-urban areas. Theavailability and reliability of moderncommunication systems also becomes evermore important as urban economies becomemore sophisticated. Around 4.9 billion peopleare expected to be urban-dwellers by 2030 -60% of the world’s population. This will placehuge pressure on existing infrastructure andcreate significant demand for housing, bettertransport systems, communications networks,energy, sanitation and healthcare.

Coal will continue to play a major part in themanufacture of the world’s steel for theforeseeable future. The well-supplied world marketmeans that metallurgical coal can be deliveredworldwide, facilitating the manufacture of steelswhich will ultimately deliver the goods and servicesthat growing economies demand.

SECTION 1

COAL & STEEL>> Steel is a fundamental material for modern life –

communications, transport, energy, health, sanitationand food all depend on it. >>

Steel Fact

Almost all coking coal istransformed into coke foruse in blast furnaces for theproduction of iron for thesteel alloy.

■ Steel

■ Coking Coal

World Coking Coal & Steel Production (Mt)

Sources: IISI & IEA

Page 6: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

4 World Coal Institute

molybdenum may be added in the BOF to giveparticular properties to the final steel.

Oxygen is blown through the molten metalbath inside the BOF, causing excess carbon tobe oxidised and emitted, leaving liquid steelwith low carbon contents.

Some steel plants use electric arc furnaces togenerate steel, where recycled material orsteel scrap is melted and then reformed forfurther use. The recycled steel is loaded intothe furnace with some iron ore, often in apartially reduced form, and high intensityelectrical power is supplied to electrodesforming an arc of electricity to raise theinternal temperature and melt the scrap.

In both cases some additional refining may becarried out to achieve the required steelspecification, but the integrated route offersthe most capability for achieving the highestquality steels, whereas the EAF route islimited in what it can produce by the qualityof the scrap.

The liquid steel, whether it is produced inBOF or EAF, is then processed via rolling millsto form a variety of products from rails tobars, wires to pipes – which are then furthertransformed for their end-use.

See Annex for more detailed information on thesteel production process.

What is Steel?Steel is an alloy of iron and carbon, whosecharacteristics are determined by the otherelements in addition to carbon. Steel isproduced via two main routes – integratedsmelting involving blast furnace (BF) ironmaking followed by basic oxygen furnace(BOF), and in electric arc furnaces (EAF).

In the integrated route, raw materials compriseiron ore in various forms and a reductant, cokeand various fluxing minerals, such as limestoneand dolomite. A particular type of coal –‘coking’ or ‘metallurgical’ coal – is used toprepare the coke. The coking coal is firstcrushed and then heated up in a coke ovenwithout oxygen over several hours. This drivesoff volatiles and some of the impurities,leaving a solid sponge-like mass of carbon-richmaterial. The iron ore is also prepared prior touse and is converted into sinter and pellets.

The coke, together with iron ore andlimestone, is then charged into the blastfurnace and heated so that the coke becomesgasified, producing a combination of carbonmonoxide and carbon dioxide. The carbonmonoxide reacts with the iron ore to form ahigh quality molten iron known as ‘hot metal’.The hot metal is collected from the base ofthe furnace and transferred to the BOF. Otherelements, such as nickel, chromium and

Definition

The iron produced from ablast furnace is called hotmetal or molten iron if it is inliquid form. In solidified form,it is called pig iron.

Definition

An alloy is a mixture of twoor more elements, at leastone of which is a metal.

Page 7: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 5

SECTION 1 END

Steel Production

Page 8: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Steel is a vital material for transport systems – cars, trains, shipsall utilise steel.

Photo courtesy of BHP Billiton Mitsubishi Alliance

6 World Coal Institute

Page 9: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 7

Coking coal has particular physical propertiesthat on heating to over 1000°C (in the absence ofair) causes the coal to soften, liquefy, thenresolidify into hard but porous lumps, known as‘coke’. As a major raw material fed into the blastfurnace, coking coals must be of high quality tosupport the charge of a blast furnace with aslittle degradation as possible, providing highthermal efficiency and metal reduction. Cokingcoals must also be low in sulphur, phosphorusand alkalis - such as sodium and potassium.

Almost all coking coal produced globally istransformed into coke in a coke oven and used inblast furnaces for the production of pig iron forthe steel alloy, although some is also used in thepower sector.

SECTION 2

GLOBAL COAL & STEEL MARKET>> Coking coal is essential for the production of steel,

providing the necessary carbon for the steel alloy. >>

Definition

Coking coal is defined ashard coal with a quality thatallows the production ofcoke suitable to support ablast furnace charge. Cokingcoals have a higher carboncontent than steam coals,which are mainly used inelectricity generation.

Coal Fact

1 tonne of coking coalproduces 1.37 tonnes ofcoke.

Low Rank Coals 47%

Lignite 17%

Sub-Bituminous 30%

Bituminous 52%

Anthracite ~1%

Hard Coal 53%

Thermal Steam Coal

Metallurgical Coking Coal

Largely power generation

Power generation Cement manufacture

Industrial uses

Power generation Cement manufacture

Industrial uses

Manufacture of iron

and steel

Domestic/ industrial including smokeless

fuel

CARBON/ENERGY CONTENT OF COAL HIGH

HIGH MOISTURE CONTENT OF COAL

% o

f wor

ld re

serv

es

USE

S

Types of Coal

Coking Coal Demand & SupplyWorld demand for coking coal increased from635Mt in 2005 to 706Mt in 2006. China, India,Japan, Russia and Ukraine together accountedfor around 74% of total global consumption ofcoking coal in 2006. The largest producers ofcoking coal are China and Australia.

Page 10: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

8 World Coal Institute

Top Coking Coal Consumers – 2006e (Mt)

PR China 327

Japan 73

Russia 53

India 42

Ukraine 30

Top Coking Coal Producers – 2006e (Mt)

PR China 323

Australia 132

Russia 64

USA 45

Indonesia 25

Source: IEA 2007e: estimated

Coking Coal TradeThere is a sizeable market in coking coal, withworld trade at 222Mt in 2006 – representing27% of global hard coal trade. Coking coalexports to Asia-Pacific are estimated to havereached 132Mt in 2006. Australia remains theworld’s largest coking coal exporter,accounting for around 55% of world exports in2006, at 121Mt. The largest coking coalimporters are countries with strong steeldemand but lacking in domestic coking coalreserves, such as Japan, South Korea and India.

Top Coking Coal Exporters – 2006e (Mt)

Australia 121

Indonesia 25

USA 25

Canada 25

Russia 10

Top Coking Coal Importers – 2006e (Mt)

Japan 73

South Korea 20

India 19

Brazil 13

PR China 9

Countries with significant coking coalreserves may choose to transform the coaldomestically and export the coke product.About 65% of world coke exports originate innon-OECD countries, including China, Russiaand the Ukraine. Some coke is exported fromOECD countries – mainly Australia, CzechRepublic, Japan, Poland and the USA. Around70% of coke is imported by major steelproducers in the OECD.

Definition

OECD is the Organisation for Economic Cooperationand Development. It is agroup of 30 membercountries who are committedto democratic governmentand the market economy.

Page 11: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 9

Steel Demand & TradeGlobal steel demand increased by 9% in 2006,reaching 1.1 billion tonnes. Although most ofthis was from China, other countries andregions have been experiencing a resurgence indemand for steel.

In Europe, strong economic growth has fuelledrecent increases in steel production andconsumption. Russia has seen strong growth insteel demand, supported by the consumerboom which is spreading to cars and houses, as well as the replacement of ageinginfrastructure. Previous sharp declines inNorth America were reversed in 2006, with theUSA producing around 100Mt of steel to helpmeet its domestic demand.

Steel making capacity is expected to increaseover coming years. In China, new capacity of54Mt per year is expected by the end of2008. The Middle East and Latin America arealso expected to significantly increasecapacity, with some 34Mt per year planned inBrazil alone.

A similar exponential growth in steel demand isexpected in India - the Indian government hasalready planned some $350bn investments ininfrastructure development during its EleventhFive Year Plan (2007-2012).

In 2006 global steel trade was up 13% to283Mt (excluding EU internal trade), whileChina became the world’s largest exporter of steel products.

Steel ProductionSteel is produced and used worldwide.Significant increases in steel production areusually the result of strong economic growth, as demand for infrastructure, products andservices, and transportation systems increases.China continues to dominate steel productionand demand, accounting for 34% of global steelproduction in 2006. Having shown a remarkablefour-fold increase between 1996 and 2006,China continues to drive productiondevelopments in the global steel sector –producing some 423Mt of crude steel in 2006– while other Asian economies exhibit muchmore modest growth (see China case study onpage 12).

Top Steel Producers (Mt)

2006 2005

PR China 423 356

Japan 116 113

USA 99 95

Russia 71 66

South Korea 49 48

Germany 47 45

India 44 41

Ukraine 41 39

Italy 32 29

Brazil 31 32

Source: IISI

Page 12: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

10 World Coal Institute

Internal Trade6Mt

Internal Trade112Mt

Internal Trade17Mt

Internal Trade4Mt

Internal Trade 71Mt

51Mt

58Mt

3Mt

18Mt

39Mt30Mt

42Mt

8Mt

3Mt

11Mt

Main World Steel Trade Flows (2006)

Main World Coking Coal Trade Flows (2006)

Source: ISSB

Source: IEA

Page 13: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 11

Consolidation in the Iron & Steel SectorConsolidation in the iron and steel sector is a recent trend, with several mergers within the generally fragmented industry. The largeststeel company, ArcelorMittal, now accountsfor around 10% of the total market. In 2006the top five steel producers accounted for19% of world production. Consolidation hasbeen occurring in most regions (except China)and is likely to continue, with moves tomaintain basic production near to rawmaterials but increasingly producing finishedsteel near to the major consuming markets.

Top Steel Exporters (Mt)

2006(e) 2005

PR China 49 26

Japan 34 32

Russia 31 30

EU25 30 31

Ukraine 30 27

Source: ISSBe: estimated

Top Steel Importers (Mt)

2006(e) 2005

USA 40 29

EU25 39 27

South Korea 22 18

PR China 19 27

Turkey 12 10

Source: ISSBe: estimated

796Mt

Source: ISSB

Arcelor/MittalSeverstahlTangshanWuhanAnshanNucorRivaTata/CorusUS SteelShandongBaosteelJFEPoscoNipponEvraz

444Mt

Top 15 Steel Producers account for 35% of World Steel Production

Share of Global Steel Production by Company

Page 14: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

12 World Coal Institute

With almost 1.3 billion people, China has thelargest population in the world. Its rapideconomic development is increasing demandfor steel from the construction, shipbuilding,and car industries. Between 1980 and 2006,China’s GDP rose at an average rate of almost10% annually, making it one of the top fiveeconomies in the world. China’s contributionto global economic growth is nearing that ofthe OECD. With 29% in 2006, it contributedmore than the USA, the EU and Japancombined. With a real GDP growth rate of around 11% during 2006, China hasexperienced a continuous increase in thedemand and use of steel.

Economic DevelopmentRapid urbanisation has led to massiveinvestments in construction projects –particularly in Beijing and Shanghai butincreasingly in inland cities. Infrastructureprojects, electromechanical producers, ships,machines, together with preparations for the2008 Olympic Games in Beijing, have alldriven demand for steel. $38 billion is to beinvested in rail construction alone in 2007 aspart of an almost $190 billion investment toincrease the rail network 20% by 2010 –requiring an enormous amount of steel. By2008 Beijing is due to have 200km ofunderground track and Shanghai is due toexpand its underground rail system from80km to 200km by 2010.

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

14

12

10

8

6

4

2

0

2006

Imports Exports

300

350

400

450

250

200

150

100

50

0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

China Coking Coal Imports & Exports (Mt)

Source: IEA

Steel Production – China (Mt)

Source: IISI

CASE STUDY: CHINA

Page 15: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 13

Car consumption in China is also starting tosignificantly increase. In 2006, China surpassedJapan to become the world’s second largestmarket for new vehicles after the US. Thechanges in car consumption coincide with the large investment made by the Chinesegovernment in the highway network. By theend of 2006, it had approximately 45,000kmand the highway network is set to expand to65,000km by 2010 and 120,000km by 2030.

China’s Three Gorges Dam is a majorconstruction project and will be the largesthydroelectric power station in the world whenit becomes fully operational in 2009. Thereservoir is over 600km long and can hold39.3km3 of water. Steel has been a vitalmaterial, with around 463,000t of steelutilised in its construction.

Steel MarketIn 2006, with a total production of 423Mt,China’s steel output was over three times thatof the next largest producer, Japan, andaccounted for 34% of global steel production.Chinese steel production in 2006 was over18% higher than in 2005.

China surpassed Japan, Russia, the Ukraineand the EU25 to become the world's biggeststeel exporting country in 2006. Withexports of 49Mt, China is exporting at therate of almost 1Mt a week. 2006 exportswere a 91% increase over the previous year.Chinese steel imports fell to 19Mt, down30% on 2005.

Coking CoalChina is the world’s largest producer andconsumer of coking coal, at 323Mt and327Mt respectively. China is also the fifthlargest importer of coking coal and seventhlargest exporter of coking coal.

China is one of the world’s biggest cokeexporters, accounting for 45% of world cokeexports in 2005, at almost 13Mt.

Top Iron & Steel Companies – 2006 (Mt)

Baosteel 23

Tangshan 19

Anshan 15

Jiangsu Shagang 15

Wuhan 14

Source: IISI

SECTION 2 END

Page 16: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Steel is involved in the entire process of water collection, purificationand delivery. It is used in large infrastructure projects, smaller watertank reservoirs, pipelines, pumps and stainless steel taps.

Photo courtesy of Eric Miller/World Bank

14 World Coal Institute

Page 17: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 15

There are thousands of types of steel – eachproviding different characteristics due to thespecific combination of elements in the alloy.Adding other elements to the hot metalprovides a wide range of alloy steels, such asstainless steel. The most common is carbonsteel, which is composed simply of iron and carbon.

Changing the amount of carbon in the steelaffects the hardness of the alloy, enabling avariety of uses. Low-carbon steel (up to 0.35%carbon) is commonly used for drinks or foodcans but can also be converted into a widerange of alloys, such as engineering steels andtool steels. Medium and high carbon steels(0.35%-over 1%) may also be used for a widerange of applications, including surgical steels.Stainless steels contain a minimum of 10%chromium, often combined with nickel, toresist corrosion.

All of these types of steel are produced usingcoal. The development impact these goodsand services have on communities – throughgrowing economies, raising quality of life andalleviating poverty – is therefore also relianton coal.

Buildings & ConstructionSteel is a universal building material due toits strength, durability, versatility andaffordability. The superstructures ofskyscrapers, bridges, high-rise apartmentsand commercial buildings and offices arebuilt with steel.

Society’s need for housing is great andincreasing. Around 1.1 billion people live ininadequate housing conditions in urban areasalone. Some 21 million new housing units areneeded each year to meet present growth indeveloping countries. Steel is an idealmaterial to help meet this growing need – it islong-lasting, versatile, earthquake resistantand 100% recyclable.

Steel is an ideal material to help meet growing demand for housing – it is long-lasting, versatile, earthquake resistant and 100% recyclable.Photo courtesy of BlueScope Steel

SECTION 3

STEEL & SOCIETY

>> Steel is essential to everyday life – cars, buildings,ships, bridges, houses, fridges and medical equipmentare all made of steel. It is an indispensable material inalmost every product we use today. >>

Steel Fact

75% of the steels usedtoday did not exist 20 years ago.

Page 18: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

16 World Coal Institute

Energy SystemsSteel is critical in the energy sector – it is usedfor fuel exploration, production, electricitygeneration and in supply infrastructure. Mines,offshore platforms, thermal and nuclear powerplants, hydroelectric dams and power plants,and renewable energy systems are alldependent on steel.

New forms of steel will enable powergeneration to reach higher levels of efficiency,helping in the drive to significantly reducecarbon dioxide (CO2) emissions from the sector.Ultra-supercritical (USC) coal-fired power plantoperate at higher temperatures and pressuresthan conventional pulverised coal plant, and canachieve operating efficiencies of greater than45%. USC plant require specialist steels inorder to withstand these conditions. These newplants are being built worldwide but continuingmaterials research is being undertaken toimprove the steels available. Other advancedtechnologies such as Integrated GasificationCombined Cycle (IGCC) depend on the use ofimproved steel materials to achieve largercommercial capacities, matching those of thecurrent conventional thermal power stations.

Even renewable energy systems are dependenton steel (and therefore coal) for theirinfrastructure needs, as well as to distributethat energy to users. Wind turbines, forexample, are supported by steel towers which are typically constructed using corrosion resistant steel.

Transmission and distribution systems alsorely on steel. The world’s tallest suspensiontower, for example, allows power transmissionlines to cross the Yangtze River in China. Each tower is 346.5m high and the projectwas built with 4300t of steel. The towers,completed for the East China (Jiangsu) PowerTransmission Project and funded by the WorldBank, form part of the 500kV transmissionline project from Yan Cheng Power Station inShanxi Provence in the north of China to DouShan Substation in Jiangsu Province in thesouth of China.

Given its role in helping to produce anddistribute electricity, steel is therefore vital to economic development and alleviatingpoverty. There are currently 1.6 billion peoplewithout access to electricity. While energysystems themselves are not sufficient toeradicate extreme poverty, they are necessaryto create the conditions for economic growthand improved social equality.

Health, Nutrition & HousingThe machines and equipment to grow, preserve,store and prepare food are made with steel.From agricultural machinery to refrigerators,knives to delivery trucks, each step of foodgrowth and preparation requires steel. Steelcans have enabled preservative-free, long-termstorage of food. Around 200 billion steel cansfor food are produced each year, many from recycled steel.

Definition

Integrated GasificationCombined Cycle plants use a gasifier to convert coal (or other carbon-basedmaterials) to syngas, which drives a combinedcycle turbine for powergeneration.

The construction of a 60 metre windturbine requires about 100t of steel.Photo courtesy of BlueScope Steel

Page 19: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 17

CommunicationModern communication systems are vital forinvolvement in the global economy. Steeltowers and masts provide hubs for mobilecommunications and broadcasting antenna andare among the tallest man-made structures. InJapan, the DoCoMo Telecommunications Toweron the roof of the DoCoMo Osaka Nankobuilding, has a maximum height of 2000m andutilises a steel design which comprises sixplates suspended and skewered to a singlemast supported with steel cables (below).

Meeting the world’s needs for freshwater is aserious challenge. At least one in five people inthe developing world lack adequate access tosafe drinking water. Steel is involved in theentire process of water collection, purificationand delivery. From large infrastructureprojects, such as dams, to smaller water tankreservoirs, from pipelines to pumps to stainlesssteel taps, steel is a fundamental constructionmaterial for both potable water and sanitation –providing essential health benefits.

Transport SystemsSteel is also a vital material for transportsystems – cars, trains and ships all utilise steel.

The safety of modern cars is provided by aninternal ‘cage’ from steel. In a collision, crumplezones around this absorb the bulk of the crashenergy while the specially fabricated cage willdeform without breaking, reducing risks topassengers. The automobile industry helps topush innovation in the steel industry withdemand for emissions reductions, stringentsafety standards and affordability. Forexample, the body weight of a car could bereduced by 24% using new lighter steels withthe same strength and safety properties,significantly reducing fuel consumption.

Ships are mainly constructed from hot rolledsteel plates which are then cut to size forparticular parts of the ship such as the hull, theinternal framing of holds and rooms, decks,chimneys and superstructure.

Steel cans are strong,tamper-resistant and protectfood and drink.Photo courtesy ofNewscast/Corus

Steel Fact

Steel makes upapproximately 55% of theoverall mass of a car.

DoCoMo Telecommunications Towerutilises a steel design. Photo courtesy of Arup Japan Client: NTT DoCoMo Kansai, Inc. Architect: NTT Facilities, Inc. & Arup Japan

SECTION 3 END

Page 20: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Viaduc de Millau, France. The largest pylon is 343 metres high, taller than the EiffelTower. Steel was essential to the construction of the bridge. Photo courtesy ofCEVM/Foster + Partners/D. Jamme

18 World Coal Institute

Page 21: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 19

Carbon dioxide is formed during the chemicalreactions in the production process as well asfrom the energy used. Major efficiency gainshave been achieved in the integrated iron andsteel sector over the last 50 years. State-of-the-art integrated processes are at, or verynear, their thermodynamic limits. This meansthat while efficiency improvements can bemade at older plants, there may be no furtherscope to directly reduce CO2 emissions from today’s best practice plants using thesame approach.

Several innovative solutions are beingdeveloped to further reduce, manage andcontrol emissions from the process, whilecarbon capture and storage (CCS) could reduce sector CO2 emissions to theatmosphere to near zero.

Carbon Capture & StorageCCS is most cost-effective when applied to large, stationary sources of CO2 – such as steelworks and power stations. CSStechnologies offer the possibility of reducingcarbon dioxide emissions to the atmosphere tonear zero without major changes to the basic industrial process of steel making. CCS would allow emissions of CO2 to be capturedfrom the iron and steel making process andpermanently stored in geological formations –preventing them from entering theatmosphere (see diagram on page 21).CCS can also be used at the power stations

generating the electricity for Electric ArcFurnaces, which would have a significantimpact on indirect emissions from steelproduction, reducing emissions over the full life cycle.

The CCS reduction potential for the iron and steel sector has been estimated to be approximately 0.5-1.5 Gigatonnes of CO2 per year.

New ProcessesFurther technological change and innovationcan bring about a reduction in sectoralemissions. Increased use of pulverised coalinjection (PCI) reduces the need for coke,avoiding emissions and efficiency losses fromthe coking process. New smelt reductionprocesses are gradually gaining market share,and the use of Direct Reduced Iron (DRI) hassignificantly increased during the last 30 years.In absolute terms, steel scrap use keepsgrowing, although its market share may besteady or even in decline.

Pulverised Coal InjectionThe injection of pulverised coal into the blastfurnace is an established technology, growing in use (see Annex for technical description).Significant interest has also been shown in theinjection of plastic wastes into blast furnaceoperations as a substitute for coke and coal.Hydrogen from the plastics can be used as fuelfor the process.

SECTION 4

STEEL & THEENVIRONMENT

>> The iron and steel industry faces a number ofenvironmental challenges, including that of CO2 emissions. >>

Definition

Pulverised Coal Injection(PCI) allows coal to bedirectly injected into theblast furnace to provide thechemical reaction agents toconvert iron ore to pig iron.PCI allows steam coal to be used in the steelproduction process.

Page 22: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

20 World Coal Institute

Direct Reduced IronAnother steel process gaining ground is theDirect Reduced Iron-Electric Arc Furnaceprocess. This is the most widely used alternativeto the Integrated Blast Furnace-Basic OxygenFurnace or scrap-EAF methods of steelproduction. Reduction of iron takes place usingnatural gas or coal – DRI is typically used incountries with large domestic reserves of gas orsteam coal, utilising indigenous resources andtherefore reducing costs associated withimporting coking coal and coke making. India, forexample, has limited reserves of coking coal andtherefore utilises its large reserves of steamcoal to reduce iron ore using DRI technology.

COREX®COREX® is a coal-based smelting process thatproduces hot metal or pig iron. The output can beused by integrated mills or EAF mills. Theprocess gasifies non-coking coal in a smeltingreactor, which also produces liquid iron. The gasis fed into a shaft furnace, where it removesoxygen from iron ore lumps, pellets, or sinter; thereduced iron is then fed to the smelting reactor.Gasification of coal reduces sulphur oxide (SOx),nitrogen oxide (NOx) and particulate emissionsby up to 99%, and the higher efficiency of theprocess reduces CO2 emissions.

FINEX®FINEX® is an innovative process for hot metalproduction. Molten iron is produced directlyusing iron ore fines and non-coking coal ratherthan processing through sintering and cokemaking. The key technologies are fluidised bedreducing reactors for the reduction of fine ore toDRI fines and a melter gasifier for melting of DRIto hot metal. Emissions of pollutants can besignificantly reduced using this process - levelsof SOx and NOx will only be 8% and 4%respectively of the emissions occurring with the

blast furnace process, and again greaterefficiency and elimination of primary processingwill dramatically reduce CO2 emissions.

The first commercial FINEX plant producing1.5Mt of hot metal per year started operationin Posco’s Pohang works in South Korea in thefirst half of 2007.

Increased Steel RecyclingSteel is 100% recyclable. In 2005, over 440Mtof steel were recycled. The EAF process usesalmost entirely recycled scrap, while the BOFprocess can also use up to 30% recycled steel.Around 43% of total world crude steelproduction is made from recycled steel.

The availability of steel scrap is an importantconcern – and a limiting factor in the applicationof EAF. As steel is ‘tied up’ in durable, long-lastingproducts, it can be many years before the steel istheoretically available for re-use. However, steelthat is used today will be recovered, processedand used again, making steel the most recycledmaterial in the world. The main sources for steelrecycling today are unwanted, or discarded cars,household appliances, steel cans, as well as oldbuildings and structures.

The by-products from iron and steel making canalso be recycled - slag, for example, can besolidified, crushed, and used in soil mix, roadsurfaces and cement.

Definition

Slag is a by-product of ironmaking, made up of moltenlimestone which hasabsorbed the impuritiesfrom the process.

SECTION 4 END

Page 23: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 21

Geological Storage Options for CO2

ULCOS is a consortium of European steelmakers with some 40 industrial organisations,research institutes and universities. The goal of ULCOS is to develop new technologies tosubstantially reduce CO2 emissions in steel making.

In its first phase, the ULCOS project willevaluate a range of options to reduce CO2emissions by using new low-carbontechnologies applied to existing plant

configurations and also by considering moreradical potential process routes that couldbecome economically viable in the longerterm. CSS is considered a major part of theproject, necessary for a number of technologyroutes. Research streams include electrolysis,greater use of natural gas, hydrogen andbiomass feedstocks.

The second phase (2009-on) will demonstratepromising technology options.

Ultra Low C02 Steel Making (ULCOS)

Page 24: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

The two main steel production processes utilised are the Basic Oxygen Furnace and Electric ArcFurnace. Post-production processes provide the raw outputs which may then be furthertransformed to their final end use, such as the production of wire at this facility.

Photo courtesy of Stahl-Zentrum

22 World Coal Institute

Page 25: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 23

ANNEX

FROM COKE MAKING TOSTEEL MAKING>> Coal is essential for iron and steel production. The two

main steel production processes utilised are the Basic Oxygen Furnace (BOF) and Electric Arc Furnace (EAF). >>

Post-production processes – casting and rolling– provide the raw outputs which may then befurther transformed in manufacturing processesworldwide for their final end use.

Raw MaterialsSteel is an alloy based primarily on iron. As iron almost always occurs as iron oxides inthe earth’s crust, the ores must be converted,or ‘reduced’ using carbon. The primary sourceof this carbon is coking coal.

Coal Use in Steel Production

Commercial ores usually have an iron content ofat least 58%. Iron ore is mined in around 50countries – the largest producers are Australia,Brazil and China. The seven largest producersaccount for about 75% of world production.Around 98% of iron ore is used in steel making.

Coking coal is converted to coke by drivingoff impurities to leave almost pure carbon.The physical properties of coking coal causethe coal to soften, liquefy and then resolidifyinto hard but porous lumps when heated inthe absence of air.

Coke MakingThe coking process consists of heating coal toaround 1000-1100ºC in the absence of oxygento drive off the volatile compounds (pyrolysis).This process results in a hard porous material -coke. Coke is produced in a coke battery which isoften located at or near an integrated steel mill.A coke battery is composed of many coke ovensstacked in rows into which coal is loaded.

The coking process takes place over long periodsof time in the coke ovens – between 12-36hours. Once pushed out of the oven, the hot cokeis then quenched with either water or air to coolbefore storage or is transferred directly to theblast furnace for use in iron making.

Page 26: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

24 World Coal Institute

Pulverised Coal InjectionPulverised Coal Injection technology has beendeveloped whereby coal is injected directly intothe blast furnace. The pulverised fuel providesthe process heat in the blast furnace to enablegasification of the coke. A secondary function isto provide some of the carbon for the reductionprocess. A wider range of coals can be used inPCI, including steam coal which has a lowercarbon content than coking coal. This methodhas a number of advantages, including reducingoverall costs and prolonging the life of existingcoke batteries.

Iron Making - Blast FurnaceDuring the iron making process, a blastfurnace is fed with the iron ore, coke andsmall quantities of fluxes. Air which is heatedto about 1200°C is blown into the furnacethrough nozzles called tuyeres in the lowersection. The air causes the coke to gasify,producing carbon monoxide/carbon dioxidewhich reacts with the iron ore, as well as heatto melt the iron.

Blast furnaces have two or three tap holes and the hot metal and slag are ‘tapped’ offregularly as they accumulate in the base orhearth of the BF. The hot metal drains into avessel known as a ladle car, which is used totransport it to the BOF plant.

Iron Making - Direct Reduction of IronAn alternative to iron making through BF is theDirect Reduced Iron process (DRI used withEAF). The share of steel produced from DRI hasincreased during the past three decades andtoday it accounts for some 5% of global ironmetal supply.

Direct reduced iron is produced via an innovativeiron making process. While the blast furnace is asmelter that melts everything and enables theremoval of non-ferrous material such as slag,direct reduction of iron is a reduction processthat does not remove this material. It musttherefore use much ‘cleaner’ ore, otherwise itwould be charged in the electric arc furnace andwould have to be melted there. The process

Definition

Fluxes – minerals, such aslimestone, which are used tocollect impurities.

Steel Fact

The average Blast Furnace –Basic Oxygen Furnaceintegrated system usesaround 0.63 tonnes of coketo produce 1 tonne of steel.

Figure 2. Electric Arc FurnaceFigure 1. Basic Oxygen Furnace

Diagram: Te AraDiagram: Corus Group

Power cables Electrodes

Scrap Steel, IronOre, Limestone

& other materials

Oxygen inlet

Tap Hole

Molten Steel

Door forremoving slag

Page 27: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 25

involves the use of pellets of iron ore ‘fines’ toproduce direct reduced iron of high quality -composed of 97% pure iron compared with the93% for pig iron from a blast furnace.

It can then be used in combination with anElectric Arc Furnace to produce steel (DRIproducts are rarely used in the integratedroute). The reduction process takes placeusing natural gas or coal - DRI is often used incountries with large domestic reserves of gas

or stranded gas fields, or with significantreserves of steam coal. DRI therefore allowsindigenous resources to be utilised.

Some of the biggest producers of DRI includeIndia, Venezuela, Mexico and Iran. India, forexample, has limited reserves of coking coal andtherefore utilises its large reserves of steamcoal to reduce iron ore using DRI technology.

Crude Steel Production Output by Process 2006 (Mt)

TOTAL WORLD:Output: 1211*Oxygen: 813Electric: 398

North America Total Output: 131

56 75

Central & South America Total Output: 46

27 18

Europe Total Output: 234

132

102

Former Soviet Union Total Output: 121

71

India Total Output: 43

21 22

Asia and Oceania Total Output: 211

130

81

PR China Total Output: 423

55

368

Africa Total Output: 19

8 11

Middle East Total Output: 15

13 2

Basic Oxygen Furnace

Electric Arc Furnace

21

Source: IISI*A small percentage of steel is also produced using open hearth & other methods (particularly in FSU)

Page 28: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

26 World Coal Institute

Over the last 30 years there has been asignificant increase in the use of electric arcfurnaces, which now account for some 32% oftotal steel production (see Figure 2 on page 24).

The Electric Arc Furnace operates on the basisof an electrical charge between two electrodesproviding the heat for the process. The power issupplied through the electrodes placed in thefurnace, which produce an arc of electricitythrough the scrap steel (around 35 millionwatts), which raises the temperature to 1600̊ C, melting the scrap. Any impurities may beremoved through the use of fluxes and drainingoff slag through the tap hole.

EAF cannot produce the wide range of steelsthat BF-BOF is able to because the use ofscrap and DRI limits the removal of impuritiesat EAF plants and the quality control that canbe achieved.

Electric Arc Furnaces do not use coal as a rawmaterial, but many are reliant on the electricitygenerated by coal-fired power plant elsewherein the grid.

Operations using the EAF system are oftenknown as mini-mills, although EAF units are alsocommon in integrated plants. They have aflexibility advantage over the BF-BOF integratedsteelmaking route as the furnace can beswitched on and off as desired, following marketdemand for products. Mini-mills are more energyefficient on site, but overall impacts need to beconsidered on a full life-cycle basis.

Steel Making – Basic Oxygen FurnaceThe most commonly applied process for steelmaking is the integrated steel makingprocess via Blast Furnace-Basic Oxygen Furnace (see Figure 1 on page 24).

In the basic oxygen furnace, the iron is combinedwith varying amounts of steel scrap (less than30%) and small amounts of flux. A lance isintroduced in the vessel and blows 99% pureoxygen causing the temperature to rise to1700°C. The scrap melts, impurities are oxidised,and the carbon content is reduced by 90%,resulting in liquid steel.

Other processes can follow – secondary steelmaking processes – where the properties ofsteel are determined by the addition of otherelements, such as boron, chromium,molybdenum, amongst others, ensuring theexact specification can be met.

Optimal operation of the blast furnacedemands the highest quality and consistentraw materials – the carbon content of coketherefore plays a crucial role in terms of itseffect in the furnace and on the hot metalquality. A blast furnace fed with high qualitycoke requires less coke input, results inhigher quality hot metal and betterproductivity. Overall costs may be lower, asfewer impurities in the coke mean smalleramounts of flux must be used.

Steel Making – Electric Arc FurnaceThe Electric Arc Furnace process does notinvolve iron making through a Blast Furnace.Instead, it reuses existing steel, avoiding theneed for raw materials and their processing. Thefurnace is charged with steel scrap, it can alsoinclude some direct reduced iron or pig iron forchemical balance.

ANNEX END

Page 29: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

Coal & Steel 27

FURTHER READING

>> Acier Constructionwww.acierconstruction.com

>> Arup Japanwww.arup.com/japan

>> Association of European Producers of Steelfor Packagingwww.apeal.org

>> Association for Iron & Steel Technologywww.aist.org

>> ArcelorMittalwww.arcelormittal.com

>> Balfour Beatty Power Networkswww.bbpnl.com

>> BBC, “Urban Growth – Facts and Figures”,June 2006

>> BHP Billiton Illawara Coalhttp://illawarracoal.bhpbilliton.com

>> BHP Billiton Mitsubishi Alliancewww.bmacoal.com

>> BlueScope Steelwww.bluescopesteel.com

>> Building Bigwww.pbs.org/wgbh/buildingbig

>> Centre for Energywww.centreforenergy.com

>> Coruswww.corusgroup.com

>> CORDIS Europahttp://cordis.europa.eu/en/home.html

>> The Economist, “Cars in China”, June 2005

>> Euroferwww.eurofer.org

>> Fédération Française de l’Acierwww.ffacier.org

>> Foster + Partnerswww.fosterandpartners.com

>> IEA, Coal Information 2006 & 2007 OECD/IEA, Paris

>> IEA, Technological Potentials for CO2 EmissionReduction in the Global Iron & Steel Industry, OECD/IEA, 2006, Paris

>> IEA, World Energy Outlook 2006, OECD/IEA, Paris

>> IEA/CIAB, Coal in the Energy Supply of China,OECD/IEA, 1999, Paris

>> Iron & Steel Statistics Bureauwww.issb.co.uk

>> International Iron &Steel Institute (IISI)www.worldsteel.org

>> OECD, Developments in SteelmakingCapacity of Non-OECD Economies, OECD,2006, Paris

Page 30: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

28 World Coal Institute

>> Stahl Zentrumwww.stahl-online.de

>> Steel Constructionwww-elconstruction.org

>> Steel On the Netwww.steelonthenet.com

>> Steel Universitywww.steeluniversity.org

>> Structuraewww.structurae.de

>> UN DESA, World Population Prospects – the 2006 Revision, United Nations, New York

>> UN DESA, World Urbanization Prospects – the 2005 revision, United Nations, New York

>> US Energy Information Administrationwww.eia.doe.gov

>> Viaduc de Millauwww.viaducdemillau.com

>> Waste Online UKwww.wasteonline.org.uk

>> WCI, Coal: Secure Energy, World CoalInstitute, 2005, London

>> WCI, The Coal Resource – A ComprehensiveOverview of Coal, World Coal Institute, 2005,London

>> World Bank, World Development Indicators2006, Washington DC

For more information on coal and the activitiesof the World Coal Institute – including copies ofall WCI publications - please visit our website:www.worldcoal.org

World Coal Institute22 The QuadrantRichmond TW9 1BPUnited Kingdomt: +44 (0) 20 8940 0477f: +44 (0) 20 8940 [email protected]

This publication may be reproduced in part foreducational or non-profit purposes withoutspecial permission from the copyright holder,provided acknowledgement of the source ismade. The World Coal Institute wouldappreciate receiving a copy of any publicationthat uses this publication as a source. No use ofthis publication may be made for resale or forany other commercial purpose whatsoeverwithout prior permission in writing from theWorld Coal Institute.

First published in the UK in August 2007Copyright © 2007 World Coal Institute

Page 31: Coal & Steel report - Home of World Coal Association · PDF fileGlobal steel production is reliant on coal. Coal is a direct input in the production of steel – almost 70% of the

The World Coal Institute promotes:

>> Coal as a strategic resource, essential for amodern quality of life, a key contributor tosustainable development and an essentialelement in enhanced energy security.

and represents:

>> A progressive industry, committed totechnological innovation and improvedenvironmental outcomes within the contextof a balanced and responsible energy mix.

The World Coal Institute is a non-profit, non-governmental association, funded by coalenterprises and stakeholders and operated bya London-based Secretariat.

The objectives of the World Coal Institute are to:

>> Provide a voice for coal in internationalpolicy discussions on energy and theenvironment.

>> Promote the role of clean coal technologiesin improving the environmentalperformance of coal.

>> Highlight the valuable role affordable andabundant coal resources play in a worldever more concerned with energy security.

>> Improve understanding of the importanceof coal as the single largest source of fuelfor electricity generation, and its vital rolein other industries – including steelproduction, cement manufacturing,chemicals and liquid fuels.

>> Form strategic partnerships and alliancesto coordinate actions and maximiseresources to improve the perception of coalworldwide.

>> Ensure decision-makers and opinionformers are fully informed of thecontribution of coal to social and economicdevelopment.

>> Address misconceptions about coalthrough the production and disseminationof information resources.

The World Coal Institute has strong contacts and relationships with important internationalagencies, including the International EnergyAgency and the World Bank, and has accreditedconsultative status with the United Nations.

Membership is open to coal enterprisesworldwide, including coal associations, withmembers represented at Chief Executive level.

WORLD COAL INSTITUTE

>> The World Coal Institute is the only organisation workingon a global basis on behalf of the coal industry. >>