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Copyright © 2011 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.

Relevance of PSM in Iron & Steel IndustryRelevance of PSM in Iron & Steel Industry

April 2011

DuPont Sustainable Solutions (DSS)

, Copyright © 2011 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.

2

Contents

Iron & Steel Making and process hazards

Top process risks in iron & steel making

Process safety incidents in Steel Industry

DSS Opportunity in the Steel Industry

, Copyright © 2011 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.

3

Overview of Iron & Steel Making Process

% Production 3% 66% 6% 25%

Is in decline due to its environmental and economic disadvantage

DR – Direct Reduction

Source: World Steel Dynamics – Worldsteel Fact Sheet.

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4

The Process Safety Management Risk Funnel

Management Systems

All Hazards

Low Hazards

High Hazards

Very High Hazards

Basic Safety

PSM Low Hazards

PSM High Hazards

Highly Toxic Materials Requirements Advanced Risk Analyses, etc.

+

+

+

ILO Document on Safety and Health Hazards in Steel Industry provides more in-depth information on hazards.

Safety & Health in Steel - ILO

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5

Low and High hazard Operations in SteelLower-hazard operation (LHO)

Any operation that exclusively manufactures, handles, stores, or uses any substances with low potential for death or major irreversible human health effects, significant property or environmental impact, or off-site impacts due to physical or mechanical hazards, toxicity, or asphyxiation.

Melting, casting, and extrusion.Tabletting and pelletizing operations.Compressed gas-assisted transfer operations.Solids processing using screw or belt conveying systems.Spinning or rolling operations with mechanical and electrostatic shock potential.Mechanical drying and/or dewatering operations (e.g., filter press).Mechanized product packaging (e.g., container filling, conveying, and palletizing).

Higher-hazard process (HHP)

Any activity manufacturing, handling, storing, or using hazardous substances that, when released or ignited (or when their energy is released), can result in death or major irreversible human health effects, significant property or environmental impact, or off-site impacts due to acute toxicity, flammability, explosiveness, corrosiveness, thermal instability, or reactivity.

Steam generation and related combustionElectric Arc FurnaceSinteringAny process using sources of ionising radiation for tracking of materials

Very High Hazards

Chemicals such as highly toxic or flammable materials

Blast Furnace, Coke ovens

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6

Overview of the iron & steel making process

1. Raw material preparation

2. Iron making

3. Steel making

4. Casting and rolling

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7

Raw material preparation

1. Pelletizing – Iron ore is pelletized a forming and thermal treatment process. This process allows better oxygen flow in the blast furnace which allows for faster oxidation and melting. This is typically performed at the mine.

2. Sintering – Iron ore is agglomerated by a vacuum combustion process to allow for efficient gas pass-through in the blast furnace. This process is typically performed at the mill.

3. Coke Oven – This process is used to derive coke from bituminous coal, which is then used as a reducing agent or fuel in a blast furnace. This process is performed at the mill.

4. Direct Reduction – This process is an is an alternative method of reduction for use in an EAF or low volume operations for economic reasons. In the process, reducing gas or coal is used to create high quality iron for steel-making. The use of this step depends on customer quality requirements.

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8

Pelletizing

Noise, Vibration, Radiant Heat, Slips, Trips and Falls, Ergonomics, Eye protection, Asbestos in byproduct, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects

Mechanical Hazards

Dust Explosion

None

All Hazards

Low Hazards

High Hazards

Very High Hazards

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9

Sintering Process

Noise, Vibration, Radiant heat, Slips, Trips and Falls, Ergonomics, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources

Mechanical Hazards

Dust Explosion, Gas explosion, fire, Sinter off-gassing (polychlorinated dibenzoparadioxin – PCDD, polychlorinated dibenzofuran – PCDF, potential source of hexachlorobenzene – HCB, polychlorinated biphenyl – PCB)

None

All Hazards

Low Hazards

High Hazards

Very High Hazards

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10

Coke Oven

Noise, Vibration, Radiant Heat, Radiation, Slips, Trips and Falls, Ergonomics, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects, Hot Surfaces

Mechanical hazards – including confined space coal powder silo break-up fatalities.

Dust Explosion, Fire, Carbon Monoxide exposure, Coal Dust Exposure

Coke Oven Gas exposure, which includes Hydrogen Sulfide, Ammonia, benzene and other carcinogenic hydrocarbons

All Hazards

Low Hazards

High Hazards

Very High Hazards

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11

Direct Reduction

Noise, Vibration, Radiant Heat, Slips, Trips and Falls, Ergonomics, Eye protection, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects

Mechanical Hazards

Dust Explosion, Hydrogen explosion

Reduction Gas exposure, which includes Hydrogen Sulfide and Carbon Monoxide.

All Hazards

Low Hazards

High Hazards

Very High Hazards

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12

Overview of the iron & steel making process

1. Raw material preparation

2. Iron making

3. Steel making

4. Casting and rolling

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13

Iron making stage

Superheated oxygen is blown into the blast furnace with Iron ore, coke and lime to produce liquid iron often called 'hot metal‘ with a typical temperature as high as 1480–1520 °C at tapping.

Coke is used for combustion to attain the high temperatures required for reduction. It generates carbon monoxide during the combustion, which acts as the reducing agent and converts the iron oxides into molten iron. Fluxes are used to make low melting slag and control the quality of Hot Metal.

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14

Iron Making Process

Noise, Vibration, Radiant Heat, Radiation, Slips, Trips and Falls, Ergonomics, Glare protection, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects, Abrasive blasting, Hot Surfaces

Mechanical Hazards

Blast Furnace Gas explosion, Dust Explosion, Handling molten metal, Superheated steam explosion

Blast Furnace Gas (Carbon Monoxide and Nitrogen) exposure

All Hazards

Low Hazards

High Hazards

Very High Hazards

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15

Overview of the iron & steel making process

1. Raw material preparation

2. Iron making

3. Steel making

4. Casting and rolling

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16

Steel making stage

In this stage, the liquid iron plus recycled scrap are converted to molten steel by blowing oxygen through the metal in a converter to remove the carbon, silicon, sulphur and phosphorous content.

Alternatively, the Electric Arc Furnace (EAF) is used to re-melt scrap iron and steel as a secondary process or can be used as a primary method. EAF’s are typically used in conjunction with a direct reducing process.

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17

Steel Making Process

Noise, Vibration, Radiant Heat, Radiation, Slips, Trips and Falls, Ergonomics, Glare protection, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects, Abrasive blasting, Hot Surfaces

Mechanical Hazards

Handling molten metal, Superheated steam explosion, Dust explosion, Toxic Dust exposure (lead, cadmium, etc.), High Current Electrical (for Electric Arc Furnace)

Off-gas exposure (Carbon Monoxide, Nitrogen, vaporized heavy metals, ozone, alloy off-gassing)

All Hazards

Low Hazards

High Hazards

Very High Hazards

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18

Overview of the iron & steel making process

1. Raw material preparation

2. Iron making

3. Steel making

4. Casting and rolling

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19

Casting and Rolling

Casting – converts the steel into solid slabs, blooms or billets.

Rolling - are applied to continuous cast slabs, blooms and billets achieve large shape changes.

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20

Casting

Noise, Vibration, Radiant Heat, Radiation, Slips, Trips and Falls, Ergonomics, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects, Abrasive blasting, Hot Surfaces

Mechanical hazards, Hydraulic oil exposure

Handling molten metal (including break-outs), Nitrogen asphyxiation, Fire due to Hot oils

None

All Hazards

Low Hazards

High Hazards

Very High Hazards

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21

Rolling and Finishing

Noise, Vibration, Radiant Heat, Radiation, Slips, Trips and Falls, Ergonomics, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects, Abrasive blasting, Hot Surfaces

Mechanical hazards, Hydraulic oils + rust inhibitor exposure, tracking sensors and thickness sensors using ionising radiation

Pickling agents (strong acids) and Hydrogen peroxide, Nitrogen asphyxiation, Fire due to Hot oils, metal coating processes with hot metal baths ( explosion, zinc exposure), organic coating processes using solvents (exposure), gas fired furnaces (explosion)

None

All Hazards

Low Hazards

High Hazards

Very High Hazards

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22

Molten Metal Transport

Noise, Vibration, Radiant Heat, Slips, Trips and Falls, Ergonomics, Eye protection, Asbestos, Insulation Wool, Confined spaces, Isolation of energy sources, Falling Objects

Mechanical Hazards

Handling/loss of containment of Molten Metal, Superheated Steam explosions (at slag dump and in plant)

Carbon monoxide exposure

All Hazards

Low Hazards

High Hazards

Very High Hazards

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23

Contents

Iron & Steel Making and process hazards

Top process risks in iron & steel making

Process safety incidents in Steel Industry

DSS Opportunity in the Steel Industry

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24

Top risks

Fire and explosions

Molten metal breakouts

Other Molten metal losses of containment

Dust Fires and Explosions

Toxic gas exposure and release

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25

Explosions

• What are the causes of explosions in furnaces?

1) Explosive items in the scrap and 2) Mixing of water and molten steel

• What contributes to explosions?

With scrap materials, there is a potential for explosives, pressure vessels and pockets of water to be introduced into the furnace. The roofs and sides of electrical furnaces are water-cooled and the accidental introduction of water onto the surface of the pool of molten slag/steel happens from time to time, usually without damage. It is when water somehow becomes trapped beneath molten steel or slag that damage and injury can occur.

Steel Industry Explosions

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26

Breakouts releasing molten metal What is a breakout?

A breakout specifically refers to the liquid steel at the center of a cooling billet/slab escaping from the surrounding skin.

What can lead to a breakout?

Typically caused by inadequate cooling to the billet or slab. This may be due to ambient conditions, increased rates or other variables.

What is the consequence of a breakout?

The primary consequence is exposure to molten metal that will be greater than 1500 Celsius.

Contact of molten metal with materials that burn or explode is very likely in a breakout scenario.

Steel Industry - Breakout incidents

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27

Other Molten Metal Losses of Containment

Can be caused by Compromised vessel integrity, including:

1. Refractory Failures – This is the internal lining of molten metal containment vessels. When the lining fails, the integrity of the vessel is compromised and deterioration of the vessel wall begins, ultimately resulting in a loss of containment.

2. Ladel/Transport Failures – This type of failure can either come from crane failures, weak spots in ladel or trench walls, or unsafe transport practices.

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28

Dust Fires and Explosions

1. Like all fires, a dust fire occurs when fuel (the combustible dust) is exposed to heat (an ignition source) in the presence of oxygen (air). Removing any one of these elements of the classic fire triangle eliminates the possibility of a fire.

2. A dust explosion requires the simultaneous presence of two additional elements—dust suspension and confinement. Suspended dust burns more rapidly, and confinement allows for pressure buildup. Removal of either the suspension or the confinement elements prevents an explosion, although a fire may still occur.

3. Further, the concentration of suspended dust must be within an explosible range for an explosion to occur. This is analogous to the flammability range commonly used for vapors (such as natural gas and propane).

4. Within a steel mill, coal dust, iron ore dust and coke dust are present, all of which can lead to a dust fire or explosion.

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29

Gas Exposure/Release What kinds of gases are we talking about?

Carbon Monoxide, Ammonia and Hydrogen Sulfide are all present in the process. Nitrogen, which can also become lethal in a closed atmosphere, is also generated.

What contributes to a gas exposure?

Leaks from equipment, pressure changes in furnaces, inadequate venting/purging, bypassing/failure of scrubbing devices before a vessel entry.

What is the consequence of a loss of containment?

Potential fires/explosions or employee exposure or death.

Steel Industry - Gas Releases

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30

Contents

Iron & Steel Making and process hazards

Top process risks in iron & steel making

Process safety incidents in Steel Industry

DSS Opportunity in the Steel Industry

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31

Bethlehem Steel – Burns Harbor Mill - Fire

What happened?On February 2, 2001, a fire killed one Bethlehem Steel millwright and one contractor supervisor died. Four Bethlehem Steel millwrights were injured, one seriously. Workers were attempting to remove a slip blind and a cracked valve from a coke oven gas line leading to a decommissioned furnace. During removal of the valve, flammable liquid was released and ignited. Investigated by CSB Relevance of PSM application?

PHA, MIQA, MOC, SWP, ER, Training

Why?Management systems for the supervision, planning and execution of maintenance work inadequate. Did not have a system for monitoring and controlling hazards that could be caused by changes in COG condensate flammability or accumulation rates. Did not have a program to identify and address hazards that might be created by decommissioning and demolition operations.

Bethlehem Steel Incident

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32

Cato Bridge Durban - Explosion

What happened?The Department of Labour closed the Assmang plant in Cato Ridge Durban, following the death of five workers in the massive explosion, in late February 2008The accident took place at a time when the plant was under inquiry for exposing 50 workers to poisonous fumes in 2007.

Findings by the department’s inspectors indicated that a water leakage into the furnace may have led to the explosion which caused the side of the control room, facing the furnace, to collapse, allowing flames to engulf the room.

Relevance of PSM application?

MIQA, PHA, ER

Why?Mechanical integrity and quality assurance that allowed leakage of water

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33

Slovak Steel – Gas release/Explosion

What happened?Thirteen people were killed and at least 170 were poisoned by carbon monoxide on Friday after a gas pipeline exploded at a steel plant in eastern Slovakia. Impact of an earlier explosion was underestimated.

Relevance of PSM application?

PHA, MIQA, ER

Why?Use of PHA for identification of PSM Critical Equipment and Emergency Response

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34

Jindal Vijayanagar Steel – India – Gas Release

What happened?

Chemical Accident occurred at a integrated steel facility involving exposure to toxic and poisonous gas while clearing the sludge pit of the scrubber system, resulting in the death of three workmen. The net work of pipelines of the said system ends at the sludge pit with water seal arrangement. Reduction in water level resulted in breaking of water seal and release of Corex gas containing more than 40% carbon monoxide. Relevance of PSM application?

PHA, SWP/SOP, ER, Training

Why?Training and awareness on hazards associated with carbon monoxide.Safe work procedures for high risk operationsIdentification of hazards and risks of Corex gas

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35

Qinghe Steel, China, - Molten Metal

What happened?

The Qinghe Special Steel Corporation disaster was an industrial disaster that occurred on April 18, 2007, in Tieling, Liaoning Province, China.

Thirty-two people were killed and six were injured when a ladle used to transport molten steel separated from an overhead rail.

Relevance of PSM application?

MIQA, PHA, SWP/OP

Why?Mechanical integrity and quality assurance on overhead rail.Use of PHA for identification of foreseeable scenariosOperating procedures and safe work practices of working below overhead rails

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36

Kremikvtzi – Gas release/Explosion

What happened?An operator reported that the pressure in the water pipeline supplying the blast furnace's gas-purifying machinery was falling.

A breakdown team was sent to the scene without coordinating with the operational management of the blast furnace and the firm's 'gas-rescue' service. Gases from the blast furnace, containing a high level of carbon monoxide, started to escape from a broken pipe. Twelve firefighters were sent in, without being given sufficient information on the concentration of carbon monoxide. More gases then started leaking due to a rapid decrease in the water level and the elimination of the machinery's 'water barrier'. As a result of this series of human errors, the noxious gases killed three people, including one firefighter. Another 22 suffered various levels of poisoning and were hospitalised. Relevance of PSM application?

SWP/OP, PHA, MIQA, ER

Why?Safe work practices and operating procedures in terms of work permitting processEmergency response in terms of assessment of potential risks before undertaking rescue operationsMechanical integrity and quality assurance to ensure pipes carrying toxic gases are classified as PSM criticalPHA to ensure that risks associated with level of water to prevent failure of water barrier

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37

Hoeganaes – Iron Dust Explosion

What happened?

On January 31 two maintenance mechanics on the overnight shift inspected a bucket elevator that had been reported to be malfunctioning due to a misaligned belt. The bucket elevator, located downstream of an annealing furnace, conveyed fine iron powder to storage bins.

The two mechanics were standing alone on an elevated platform near the top of the bucket elevator, which had been shut down and was out of service until maintenance personnel could inspect it. When the bucket elevator was restarted the movement immediately lofted combustible iron dust into the air. The dust ignited and the flames engulfed the workers causing their injuries. A dust collector associated with the elevator was reported to have been out of service for the two days leading to the incident. One worker later died.

Relevance of PSM application?

SWP/OP, PHA, MIQA

Why?Safe work practices and operating procedures in terms of work permitting processPHA in terms of assessment of potential risks before undertaking rescue operationsMechanical integrity and quality assurance regarding routine maintenance of the dust collector.

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38

Contents

Iron & Steel Making and process hazards

Top process risks in iron & steel making

Process safety incidents in Steel Industry

DSS Opportunity in the Steel Industry

, Copyright © 2011 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.

39

DuPont SWOT in Steel Industry

Strengths

Existing relationship with clients in Steel industryPSM Work in Tata Steel/NatSteelDuPont brand recognition in PSMGlobal Presence for consistency of implementation in multinational companies

Weakness

Perceived as "Chemical" CompanyUnderstanding of process/operational risks in steel industry

OpportunityIncreased perception and understanding of risksMOC-T and MOC-F processesDeveloping Regional Steel Entities Perceived value of PSM experienced by steel industry players such as Tata/NatSteel

Threat

Commodity cost control impacts Safety PerformanceLow use of Process Safety ConsultingOSHA and EPA have been driving improved performance in US.

SWOT

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40

List of Steel Companies

Review the list of Steel companies

Identify the top potential companies for various practices

Develop account strategies

Define how practice can help

Steel Industry List

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41

Discussion with select steel industry community

Create a Community network for Steel Industry of interested stakeholders

Brainstorming session to discuss value proposition for Steel Industry

Gather additional relevant information

Document and share with interested stake-holders and generate additional business

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42

Supporting Slides

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43

Further reading

Worldsteel.org

Steeluniversity.org

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44

Potential Segmentation Criteria

1. Revenue/Firm Size

2. Multi-national/National

3. Level of PSM familiarity/PSM performance

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45

Porter’s 5 Forces Industry Analysis Framework

Force Drivers

• Threat of New Entrants

• High transportation/energy costs

• Increased Environmental Regulation and Fines

• Integrative trends have resulted in increased value chain control for incumbent companies

•Competitive Intensity

• Commodity pricing

• Industry is characterized by large multinationals with limited diversification

• High Exit costs

• Economy of Scale Cost advantage is central to industry

• Threat of Substitutes

• Stone, brick, fiberglass provide better performance in some applications

• In most markets, consumers would bear high switching costs.

Threat of New Entrants

Competitive Rivalry within an

Industry

Threat of Substitute Products

Bargaining Power of

Customers

Bargaining Power of Suppliers

Metals and Mining Industry

Source: Datamonitor: Global Metals and Mining 2009

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46

Porter’s 5 Forces Industry Analysis Framework (cont’d)

Force Drivers• Bargaining Power of Customers

• Lack of product differentiation

• Forward Integration in related markets occurs regularly

• Buyers tend to buy bulk quantities and are large

• A myriad of applications ensures large numbers of consumers

• Bargaining Power of Suppliers

• Non-renewable input materials

• Supply is price dependent (ex. 2009)

• Backward integration into mining can relieve some pressure but is capital intensive

Threat of New Entrants

Competitive Rivalry within an

Industry

Threat of Substitute Products

Bargaining Power of

Customers

Bargaining Power of Suppliers

Metals and Mining Industry

Source: Datamonitor: Global Metals and Mining 2009

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47

Asia dominates Steel Production Volumes, led by China and Japan

11.4% 2.4%

8.0%

6.8%

3.1%

1.2%

1.4%

65.6%

2009 Production (%) by Region

European Union

Other Europe

Former Soviet Union

North America

South America

Africa

Middle East

Asia

Source: Worldsteel Statistical Yearbook 2010

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48

Steel Production Primary Process

Source: World Steel Association

Iron Making StageSuperheated oxygen is blow into the blast furnace with Iron ore, coke and lime to produce liquid iron often called 'hot metal‘ with a typical temperature as high as 1480–1520 °C at tapping.Coke is used for combustion to attain the high temperatures required for reduction. It generates carbon monoxide during the combustion, which acts as the reducing agent and converts the iron oxides into molten iron. Fluxes are used to make low melting slag and control the quality of Hot Metal.

Steelmaking StageIn this stage, the liquid iron plus recycled scrap are converted to molten steel by blowing oxygen through the metal in a converter to remove the carbon, silicon, sulphur and phosphorous content. Alternatively, the Electric Arc Furnace (EAF) is used to re-melt scrap iron and steel.

Casting & Rolling Casting – converts the steel into solid slabs, blooms or billets. Rolling - are applied to continuous cast slabs, blooms and billets achieve large shape changes.

Sintering, Pelletizing, or a combination used here.

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49

Secondary Steel Making

• Secondary steel is produced in an electric arc furnace (EAF) or in an induction furnace (IF) using scrap.

• Scrap metal with limited amount of other iron-bearing material is melted by using an electric current.

• Because scrap can contain a wide range and higher percentage of contaminants, steel produced using this process requires additional refining.

• Direct reduction of iron and use of an EAF is a viable alternative in primary steel making for low volume plants with energy constraints.

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Arc Furnace Failures

What are Arc Furnace Failures?

Arc furnace failures arise due to erratic loading, short circuiting, or unusual load patterns of the transformer causing mechanical stress on the transformer.

What are the consequences?

Fires or explosions due to uneven heating or arc flashes.

Steel Industry - Arc Furnace Failures