UNIVERSITY OF JOHANNESBURG

Xstrata in Rusternburg

Group assignment 2

MALOTANA VS 200906021BOLIBE VL 200914581BOOI MS 200928057MAVIMBELA BF 200729464MATABA TM 200905172MALULEKA NP 200927257MBOKAZI L 200711461NZUZA K.B 200941572SEBOTHOMA N.M 200821717

9/18/2012

PRODUCTION OF IRON AND STEEL 3

TABLE OF CONENTS

1. INTRODUCTION1.1 Ferrochrome industry in South Africa1.2 Xstrata 1.3 Business profile of the Ferro-alloy division1.4 Xstrata (Rustenburg plant)

1.4.1history of the plant1.4.2 Plant Capacity

2. Production process

2.1 process flow diagram

2.2 SAF diagram

2.3 process description

2.4 reactions within Submerged Arc Furnace (SAF)

1.5 HISTORY OF X-TRATA PLANT IN RUSTERNBURG1.6 PROCESSES USED IN X-TRATA

INTRODUCTION

This paper is going to discuss the production of high carbon ferrochrome in Rustenburg plant of Xstrata. The history of the plant and the process used in the production will be discussed.

The second part will be to discuss the reactions involved in production of ferrochrome and at what temperature are they feasible

The last part will discuss the technical and production challenges that South Africa are facing when producing high carbon ferrochrome and propose solutions.

1.1 Ferrochrome industry in South Africa

World resources are estimated to be greater than 12 billion tons of shipping-grade chromite, sufficient to meet demand for centuries. The region of 95% of the world’s chromium resources are concentrated in Southern Africa and Kazakhstan. South Africa is the world's largest producer of ferrochrome. The country holds about 70% of the world's total chrome reserves, mostly located in the Bushveld Igneous Complex (BIC) ores, and produces 75% of the world’s ferrochrome. India and Kazakhstan are other major producers.

Chromite is mined primarily from the UG2 (upper group 2), LG (lower group) and MG (middle group) chromitite seams of which the UG2 also contains significant amounts of PGE's (Platinum Group Elements). Thus several platinum mines produce chromite as a by-product. There are several primary chrome mines, specifically maintained to provide chromite feed to the developing ferrochrome industry. Most of South Africa's chrome mines are developed along the Eastern BIC, in the Steelpoort Valley.South Africa produced an estimated 9,600,000 t of chromium ore in 2009.

1.2 XSTRATA

Xstrata South Africa, a subsidiary5 of Xstrata plc, comprises Xstrata Alloy sand Xstrata Coal South Africa.The Xstrata Alloys Ferroalloys division is theworld’s largest producer of ferrochromeand a leading producer of vanadium. Italso produces char and paste, for use in its smelters and for sale to customers. Its platinum group metals (PGMs) division mines PGMs and produces PGM concentrates.Xstrata Coal South Africa, a division of Xstrata Coal, which has its headquarters in Sydney, Australia, produces thermal coal for use in power stations

1.3 BUSINESS PROFILE OF THE FERRO-ALLOY DIVISION

Xstrata-Merafe Chrome Venture Xstrata-Merafe Chrome Venture World’s largest producer of ferrochrome, accounting for about 20% of the world’s annualferrochrome production. Its attributable ferrochrome saleable production in 2010 was 1,165 kt**

Nature of business Pooling and sharing ventureEmpowerment partner Merafe Resources participates in 20.5% of the earnings before interest, tax,depreciation and amortisation (EBITDA) with an option to increase its participation to 26%. XstrataAlloys participates in 79.5% of the Venture’s EBITDA

Operations 20 furnaces on five production sites with the capacity to produce 1 979 000 metric tonnes offerrochrome a year, nine chrome mines and access to UG26 ore from six UG2 facilities. Operations arelocated in the North West, Limpopo and Mpumalanga provinces

Product and uses Ferrochrome (FeCr), which is a corrosion-resistant alloy of chrome and iron. Most of our ferrochromeis used in the production of stainless steel. Stainless steel is used in food production and storage,pumping and storage of acids, gas and oil production, the storage and desalination of water,architecture, medical applications, cutlery and building applications

Markets The Venture supplies ferrochrome to stainless steel mills in Europe, America and Asia (including China,Japan, Taiwan and Korea)

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1.4 Xstrata (Rusternburg plant)

Xstrata Rustenburg is situated in the industrial area of the Rustenburg town, about 4km from the Xstrata Alloys head office. It made its first shipment in 1989. The plant receives its ore supply from the Xstrata-Merafe mining operations in the area. Rustenburg is currently constructing a new Pelletising plant. The Tswelopele Project will supply 600kt of pellets per year and make Rustenburg self-sufficient in terms of pellet supply. The project is scheduled to produce its first pellets in the second half of 2012.

1.4.1 History of the plant

Xstrata Rustenburg operations commenced with the commissioning of furnaces 1 and 2 in 1989. Production capacity was 130 000 tonnes of ferrochrome alloy per annum.

In 1990 a third furnace was commissioned producing 65 000 tonnes of ferrochrome per annum.

This development was followed by the commissioned of a Recovery plant in 1992 with a total production of 24 000 tonnes per annum.

During 1995 furnace 4 was commissioned producing 87 000 tonnes per annum. Two years later Xstrata purchased two furnaces 5 and 6 from CMI with a production

capacity of 120 000 tonnes per annum. The pelletising plant was commissioned in 2002 and thereafter in 2005 the second

alloy recovery plant was commissioned. Xstrata Rustenburg Works received its SABS ISO 9002 listing in 1993 and ISO 14001:

1996 in 1999. The Rustenburg plant ISO 9001: 2000 and ISO 14001: 2004 certifications from the

SABS were obtained in 2002 and 2006 respectively.

1.4.2 Plant Capacity 430 000 ton of Ferrochrome per Annum

- Normal Grade Product and Alternative Grade Product-Recovery Product (Typical < 3% slag)

6 Furnaces with 220MVA Installed Capacity Agglomeration Capacity 900 000 ton p.a.

- Blocks 400 000 ton p.a. and Pellets 500 000 ton p.a. Recovery Plant: 30 000 ton Ferrochrome p.a. Product Specification (Ferrochrome): 48-52% Cr, 7-8% C, 3-5% Si, 35-37% Fe

2. Production process 2.1 Proccess flow diagram

2.2 SAF Diagram

Production process

Ferrochrome production is essentially a carbothermic reaction which takes place at high temperatures.

The ore is mined from the Merafe mines and transported to the plant. In the plant beneficiation takes place. Crushing: the ore is crushed to size; a certain percentage may be milled further. Screening: the ore is sorted into different size fractions by dense media separation. If

there are any fines they are sintered, because fines choke the furnace preventing top gases from leaving the furnace.

The ore is then fed into the Submerged Arc Furnace. The Cr ore is reduced by coal and coke to from the iron chromium alloy. The heat for this reaction typically comes from the electric arc formed between the

tips of the electrode in the bottom of the furnace. This arc creates temperatures of 16000C-28000C Tapping of the material takes place at 16500C, whereas slag is tapped at 17500C. Upon tapping a stream of metal rushes down a trough into a chill or ladle where is

cools down and solidifies in larges castings which is crushed into certain sizes Packing and transportation than take place.

Input Ore (chromite) Coke Coal Iron Scrap water Maintainance Electricity Labour

Output Ferrochrome Slag Slime Off-gas(CO2,SO2,NO2) dust

2.3 Process description Effect on Coke

The primary purpose of the coke in ferrochrome production process is as reductant. Due to post-combustion in the furnace freeboard the surface temperatures of the charge are expected to be higher. It is anticipated that at high temperatures some amount of the coke present may be gasified thus will not serve the purpose as reductant. This will lead to coke deficit ferrochrome making process. Thus demands for excess coke requirements than current level. However this situation may be circumvented by controlling the temperatures and oxygen injection.

Effect of Carbon Monoxide Gas in Submerged Arc FurnaceThe reduction reactions in submerged arc furnace generate about 650-750 Nm3 of carbon monoxide rich offgas per ton of FeCr metal with reaction energy of ~ 7550-8300 MJ (2100-2300 kWh) by assumption of good furnace sealing. The combustible gas produced during smelt reduction reactions consist of high concentrations of CO. The typical composition of CO rich-off gas is given in Table 1. The CO gases formed are suckedout from the closed furnace through two take offs to wetting scrubbers. The CO gas is transferred by meansof pipelines in the plant area as easily as any fuel gas. The CO gas is used in coke drying, sintering, preheating and heating of ladles.

Effect on Refractory

While carrying out post-combustion in furnace freeboard, it is expected that the sidewall refractory and roof may be exposed to high temperatures due to post combustion heat since radiation is the dominant heat-transfermechanism at high temperatures. This could lead to the rapid erosion of the refractory material. The furnace interior especially the carbon electrodes and its steel casing are also likely to experience damage due to the post-combustion heat. In order to overcome this, the combustion of CO gas inside submerged arc furnace free board must be carried out selectively which can be achieved by proper injection of the combustion oxygen.This includes the optimization of the various oxygen injection parameters like injector height, angle and velocityof inlet oxygen.

Flux: Silica is used to flux, its main objective is to make the slag fluid enough for successful separation of the metal and slag.

Electrical energy: It is used to drive the reduction of chromium oxide an iron oxide by creating isothermal conditions in the furnace

2.4 Reactions within the SAF

3. South African producers are facing the quadruple whammy of increase production cost power rationing; reduce ferrochrome prices and higher volume export of chrome ore to producers and competitors in china. Paradoxically many SA miners and producers are forced into the expert of ore for many needed extra revenues at a time when many plant are only producing at 50% capacity.High carbon ferrochrome process is energy intensive, consumes approximately 3300 to 3400 kilowatts per ton of metal produced. This aims to about 34% of the total ferrochrome production cost. This brings about a need to look for an alternative source of energy. In ferrochrome making processes large volumes of high concentration of carbon monoxide gas (85% v) is developed at 400 to 500 degrees Celsius, which is combusted in a furnace and represents a high potential for significant electrical energy savings. Factors which affect energy consumption in this process include the quality of raw materials and their pre-treatment before smelting, the utilization of reaction energies and heat content from the process. This is one major limiting power in the growth of ferrochrome industry in SA, is inadequate power supply.The efficiency of the ferrochrome is very much driven by the type of pre-conditioning of feed materials. The processing of fine feed material requires higher operating temperature and consequently high power input to ensure the even flow of materials to prevent sintering or chocking of furnace charge. SA is landlocked far from major markets; this adds a huge distribution cost component.Cost analysis of chrome ore reduction is the most important issue facing ferrochrome producers in today’s competitive environment. Much of this depends on queuing and various ratios in the actual ores. The latter can have a direct bearing on the electrical consumption and optimum efficiency of the furnaces. While the industry has been successful in the reducing costs by designing and more efficient fast furnaces, the role of the ever increasing pressure on the profit margins of ferrochrome producers and the gradual depletion of deposits of rich, hard, lumpy chrome ore calls for the ferrochrome industry to maximise the use of time Fractions of concentrations and friable chromite ores.The challenges or current ferrochrome production are reduction of investment and operating costs minimizing waste and improvement of the performance of processes.

Recommendation of saving on energy2. DESCRIPTION OF POSTCOMBUSTION2.1 ReactionsIn post combustion, chemical energy available in furnace off gas is used for heating the charge in furnace. It consists of burning the CO and H2 gas evolving from charge by providing the oxygen for combustion. Potential sources for CO and H2 generation in ferrochrome production process include the carbothermic reduction of chromite, iron oxides and silicates. H2 originates from the reduction of moisture in charge.

2.2. Hypothesis of Post-combustionThe most significant opportunity for energy savings in submerged arc furnace smelting can be found in utilization of chemical energy of CO gas for heating of the charge by combusting the gases in furnace freeboard. Post combustion to some extent occurs in almost every SAF operation even if there is no post-combustionsystem installed on the furnace. Air drawn into the furnace due to minor leaks provides the oxidant for burning a portion of the CO and H2 generated during ferrochrome making. CO will be the predominant gas in the freeboard during the SAF operation. Temperature of this gas is generally close to 400-600 0C and has highcalorific value (~ 2492 kWh). If this CO rich off gas is burned in the freeboard it is possible to recover heat within the furnace. It can be expected that 30-40% of the theoretical heat content of the CO could be transferred to the charge surface through efficient post-combustion of CO in furnace freeboard. This can result inpotential electrical energy savings per ton of ferrochrome metal produced. In Table 3, the theoretical potential energy savings per ton of metal which can result based on the above hypothesis at different combustion rates at realistic heat transfer efficiencies of 40% are shown. It can be seen that at combustion rate of 50%, around500 kWh of electrical power can be substituted by combustion energy of the CO rich off-gas per ton of ferrochrome metal produced technology .There are a number of factors driving the development and implementation of technologies in the South African ferro alloy industry, some of which are discussed in more detail elsewhere in this paper. The rising real costs of electrical energy, coke and environmental compliance are the major concerns, but any technical solutions will need to maintain high levels of furnace availability. The economics are very sensitive to furnace availability and careful consideration has to be given to the implementation of new technologies, delivering for example increased unit capacities (annual tonnes installed) or higher intensities (kW/m2), not to negativelyaffect furnace availability[13]. The implementation of the Kyoto Protocol by the European Union provides significant opportunities for the ferro alloy industry in South Africa to implement CO2 reduction technologies which could be traded in terms of the Clean Development Mechanism (CDM), the so called “carbon credits”

which are currently valued at _14/t CO2 equivalent[14]. The installation of an electricity generation facility driven by the CO-rich furnace gas is an obvious means of achieving a CO2 saving and has been implemented successfully at the Metalloys plant of Samancor Manganese[15].

Concluding Comments on TechnologyThe technological development of the South African ferro alloy industry over the past few decades and direction for the future can probably summarised by the following trends:• Increasingly stringent environmental legislation and enforcement have decreased the pollution and particulate emission levels from ferro alloy plants quite dramatically.• Electricity tariff models, which all incorporate severe price premiums during the winter months, have resulted in producers rescheduling their production profiles to minimise the effect of electricity costs.• Concerns about possible increases in electricity costs, increased international coke prices and limited available coke and metallurgical coal have forced producers to reconsider their technology options.o Since 1998 a total of 7 large, closed ferrochromium furnaces have been equipped with preheaters, utilising furnace gas.o A total of 9 pelletizing and sinter plants have been installed to agglomerate chromite, which improves energy and metallurgical efficiencies. These plants provide sintered pellets to both new and existing furnaces.o A feature of the new Xstrata Lion project for ferrochromium production is its reduced dependence on electricity and coke.• There has been a gradual move away from furnace technologies with low efficiencies.Almost all new furnaces are closed and utilise agglomerated, primarily sintered and pelletized, ore feed. These include furnaces by Assmang Chrome, Merafe, Hernic Ferrochrome and IFM. Tata Steel opted for agglomeration via the briquetting route.o Two DC arc furnaces for ferrochromium production have been commissioned by Samancor Chrome since 1996. Major features of these furnaces are high chromium yields, utilisation of lower grade fine chromite, and also cheaper reductants. More DC furnaces are in different phases of project planning.• There has been a general movement towards larger furnaces. These furnaces are all closed and linked to agglomerated ore feed and some to preheating.Hernic Ferrochrome has installed a 78MVA closed furnace, producing Cr from preheated sintered pellets. This furnace currently operates at the highest operating load of all ferrochromium fur14INFACON XI furnaces worldwide.Several furnaces at Samancor, Merafe, Assmang Chrome and IFM have been newly installed or upgraded to levels of between 54 and 66MVA.

• There have been tentative steps towards testing new technology frontiers. The AlloyStream technology is being exploited in co-operation with Samancor Manganese for the production of HCFeMn. The details of this process are protected by confidentiality and intellectual property arrangements.• New investments in the manganese and silicon based alloys have been limited and no new furnaces have been built in the last few years. The only exception is a medium-sized SiMn furnace at Samancor Manganese commissioned recently. The AlloyStream project will be the first substantial capacity expansion project, although Assmang Manganese and Siltech are also considering new furnaces.In summary, technology developments in the ferro alloy industry have mainly been refinements and improvements of conventional submerged-arc technology, the introduction of viable DC furnaces for ferrochromium production, and the announcement of new technology for HCFeMn production. The future will demandfurther improved efficiencies and economies of scale. It is thus conceivable that large, closed submerged arc furnaces, improved preheating processes and a new generation DC arc furnaces will be the technologies of choice for the foreseeable future.

Infrastructure and logistics.

For new entrants to the ferro alloy business the situation is perhaps even more problematic. A topical current situation is prospective investors in the manganese ore and alloy industry. The ore resources are in the Northern Cape Province, which is logistically linked by rail to the Saldanha and Port Elizabeth ports. There is limited rail capacity available on some of the rail sections on these routes and constraints in terms of port infrastructure to handle additional volumes. The South African rail transport operator, Spoornet, is hesitant to invest in additional wagons and locomotives to move additional ore and product to the ports unless it receives the required financial guarantees. The current FOB tariff for manganese products to Port Elizabeth is already high due to the mentioned limitations, but could increase if Spoornet has to spend additional capital to upgrade the railway line. A new port, Ngqura, is under construction near Port Elizabeth to service theCoega Industrial Development Zone. Transnet, the state transport utility, is committed to relocate the present manganese terminal from Port Elizabath to Ngqura, but the timing thereof has not been finalised. All three present major role-players mining iron and manganese ores in the Northern Cape Kumba Resources, Assmang and Samancor have been quoted voicing concerns about the high transport costs and constraints to expansion due to lack of rail capacity.What is encouraging is that all role-players have recognised the logistics problem and its effect on the economy and are committed to contributing towards the required restructuring process. The National Freight Logistics Strategy document is very clear

in formulating the problem statement as well as committed to the corrective measures identified in its proposed strategy implementation. There are, however, industry concerns about government’s apparent reluctance to involve the private sector in the programme, given the existing restrictive legislative and regulatory framework. In the 2006 National Budget approval was given for substantial capital expenditure on infrastructure, which includes the road, rail and port systems. In terms of the latter, the National Ports Authority has embarked on an intensive capital expenditure programme and has brought infrastructure development forward by 10 years. They have again confirmed their commitment to support the economic growth blueprint and to reduce operating costs in real terms. Major approved projects to improve port infrastructure total R1,9 billion in 2005/6, R2,6 billion in 2006/7 and R1,4billion in 2007/8.There is no short-term solution for the present infrastructural constraints and resulting high costs. It would be unrealistic to expect the cost structure to improve substantially in the near future. In fact, the congestion situation and high costs may worsen before improvements are seen. The Transport Committee of the FerroAlloy Producers Association (FAPA) is interacting with the relevant authorities on these issues on a regular basis.In conclusion, although the infrastructure capital investment programme will take time for implementation, all role-players are committed to ensure that the logistics infrastructure in South Africa will support the anticipated continued growth of the ferro alloy industry

References.

1. Sarma B, Novak R. C & Bermel C. L.(1996). “Development of postcombustion practices at Bethlehem Steels Burns Harbon Division”, Steelmaking conference proceedings, 115-122.

2. Farrand B. L, Wood J. E & Goetz F. J.(1992) “Postcombustion trials at Dofasco’s KOBM furnace”, Steelmaking conference proceedings, 173-179.

3. Gou H, Irons G. A & Lu W. K. (1992) “Mathematical modelling of postcombustion Dofasco’s KOBM”, Steelmaking conference proceedings, 181-185.