22nd January 2003

File Reference: u:\Guidelines - BlueScope Lysaght PowerPoint Template

Port Kembla Steelworks

Blast Furnace Technology & Ironmaking Process

RBS Investor Lunch

OSCAR GREGORY, General Manager Iron & SlabAustralian and NZ Steel Manufacturing Businesses

October 2010

Page 2

Important notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEEL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR.

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”, “INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THE NEGATIVE THEREOF OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS, OR INDUSTRY RESULTS, EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.

TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FOR ANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS.

3

Overview of Steel Production Processes

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?

Steel Scrap

Scrap Ladle

Electric Arc Furnace

Continuous Casting Machine

Molten Steel Ladle

Basic Oxygen Furnace (converter)

Molten Iron

Torpedo Ladle

Blast Furnace

Hot rolled strip mill

Cold rolled strip mill

Wide coil Narrow strip

Electrical coil Metal Coated coil

Cut lengths

PlateReversing mill

Slab

SCRAP ROUTE

MOLTEN IRON

ROUTE

STEEL PRODUCTION FLAT PRODUCTSSEMI’s

Painted coil Laminated coil

H-section I-section T-section U-section Z-section L-section Rail

I-sectionH-sectionRound Square Half Round Flat

Seamless tube mill

Wire rod Wire drawing

Wire

Tubes Welded tube mill

Rod mill

Heavy section

mill

Bar/Section mill

Billet

Bloom

LONG PRODUCTS

4

Steel Production Processes – Integrated Plant and “Mini-Mill”

Flat Products “Mini-Mill”

EAF/Thin Slab Caster

Flat Products

Integrated Plant

Iron Ore

Coal

Coke

COKE OVEN

SINTERING

BLAST FURNACE

Slag

Molten pig iron

CONVERTER (BOF)

Sintered ore

“Graded” Liquid Steel

REFINING STAND

Slab

CONTINUOUS CASTING

ROLLING MILL

Hot Rolled Coils

REHEAT FURNACE

ROLLING MILL

“Graded” Liquid Steel

REFINING STAND

Scrap

& HBI

ELECTRIC ARC FURNACE

TUNNEL FURNACE

Raw liquid steel

Hot Rolled Coils

THIN SLAB CASTING

e.g. Port Kembla Steelworks e.g. NorthStar BSL

5

Overview of Steel Production Process – Pt Kembla

Slab

Hot rolled strip mill

Cold rolled strip mill

Wide coil Narrow strip

Electrical coil Metal Coated coil

Cut lengths

PlateReversing mill

FLAT PRODUCTS

Painted coil Laminated coil

Tubes

Welded tube mill

CONVERTER (BOS)

COKE OVEN

Iron Ore

Coal

Coke

SINTERING

BLAST FURNACE

Slag

Molten pig iron

Sintered ore

“Graded” Liquid

Steel REFINING STAND

Slab

CONTINUOUS CASTING

ROLLING MILL

Hot Rolled Coils

REHEAT FURNACE

6

Overview of Steel Production Process

Run out tablecooling

Minimill Thin-Slab Casting – 1 to 2 Mt/a

– 300 to 400 m4-6 m/minute

50-60mm thickHolding furnace

Finisher

300-400 m

1-10mm thick

Coiler

20-40 metric ton coil

Integrated “Conventional” Slab Casting – 3 to 5 Mt/a

– 500 to 800 m

200-300 mm thick

20-40 metric ton coil

1-2m/minute

Gas cutter

Cooling

Reheat furnace

RougherCoil box Finisher

1-10mm thick

Coiler

500-800 m

Run out tablecooling

Strip Casting – 0.5 Mt/a

– 60 m15-150 m/minute

Scale ControlChamber

20-40 metric ton coil

0.7 - 1.8 mm thick

60 m

Mill

Coiler

Run out tablecooling

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Steel Production – NZS has a Unique Process

Continuous

Casting

Machine

MHF 5

MHF 4

MHF 3

MHF 2

PC

Coal

&

Limestone

Kiln 5

Kiln 4

Kiln 3

Kiln 2

Storage Hopper

Liquid Raw Iron &

Vanadium Slag

Weigh

BridgeVanadium Slag

VRU LTS

Steel

Slag

Slag

Melter 1

Dry PC &

Electricity

KOBM

Slag

Processed

Liquid

Iron

Slab

KOBM/LTSKILNS MELTERS CCM

Scrap

Continuous Ironmaking Process Batch Slabmaking Process

Millscale

Added

Millscale

Added

MHF Off-Gas

Kiln Off-Gas

Melter Off-Gas

To Electricity Grid

MHF Cogeneration Kilns Cogeneration

RPCC

Fluxes

Ironsand From

Mine

Melter 2

Dry PC &

Electricity

8

Markets and Supply Chain – Port Kembla

Building &

Construction

Export

Domestic

Distributors

Distribution

& Solutions

Australia

Direct

Manufacturing

Pipe & Tube

Western Port

Illawarra

Page 9

Consumption of primary raw materials at Port Kembla Steelworks

Note: (1) coking coal volumes shown are dry tonnes; market pricing is typically for wet tonnes, 8% moisture content difference to dry tonnes

(2) measure shows tonnage rate used in steel making, and excludes coal used for export coke making

(3) 40% of scrap feed is sourced externally; balance, internally sourced scrap.

Indicative use rate

FY2008 FY2009 FY2010 per slab tonne

Iron Ore

Fines 4.0 2.9 4.0 0.97t

Lump 1.6 1.0 1.5 0.31t

Pellets 2.3 1.6 1.5 0.24t

Total 7.9 5.5 7.0 1.51t

Coal

Coking (1)

3.0 2.2 2.7 0.49t

PCI 0.6 0.4 0.7 0.14t

Anthracite 0.1 0.0 0.0 0.02t

Total 3.7 2.6 3.4 0.65t

Scrap (3)

1.0 0.7 0.9 0.2t

Raw Steel Production 5.3 3.5 4.7

Export Coke Despatches 264kt 282kt 175kt

Volume consumed in production (dry mt)

Reflects mix shift

from sinter plant

upgrade

(+1.1mtpa fines,

-1.0mtpa pellets)

Possible slight

shift towards

higher PCI use

in future in lieu

of hard coking

coal

Includes

around 300kt

consumed

for export

coke

despatches

(2)

Page 10

Notes:

(1) Slab, HRC and plate. Variances of totals from sum of constituents is be due to rounding

(2) See Coated Australia Annual Capacities slide for Western Port Works capacities

(3) Domestic HRC ex Port Kembla Steelworks only; ie excludes export HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1

(4) Export HRC ex Port Kembla Steelworks only; ie excludes export HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1

(5) See Coated Australia Annual Capacities slide for Springhill Works capacities

(6) See ASX Release, Attachment 1 for detail

PKSW – Production & Despatch Flow

Domestic21 0

Port Kembla Steelworks

Slab ProductionFY 2010 FY 2009

4,724 3,517

Domestic555(3) 425

Interco985 796

Domestic1,011 900

Export535(4) 409

Interco1,558 1,241

HRC2,648 2,075

Export547 341

Domestic85 72

Interco85 72

Export43 46

Domestic183 175

Plate311 293

Western Port (2)

Springhill(5) /

Distribution

Asia / Nth

Am(6)

Distribution

Slab 1,678 1,098

Hot Strip Mill

Plate Mill

Product / DestFY10 kt FY09 kt

Legend:

Port Kembla Steelworks

Despatches(1)

FY 2010 FY 2009

4,636 3,466

Inventory movements

& yield losses

Export672 302

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Cokemaking

16

12

GAS

PROCESSING

COKE SCREEN

3.0Mtpa

BLENDED COAL

COKE PLANT

2.3Mtpa COKE

SOLIDS

Cokemaking Process Overview

TARSULPHATE

39Kt 86Kt

BTX

(Benzene)

23ML

COKE OVENS GAS 19,000TJ

Interworks energy (boilers,

furnaces)

BREEZE(< 10 mm)

NUT(10 – 25 mm)

LUMP(25 – 80 mm)

TATA(20 – 50 mm)

86%

7%

2%

5%

Coke usage

Blast furnaces 1.9Mtpa

Sinter plant 0.2Mtpa

Export 0.2Mtpa

2.3Mtpa

Export coke

BlueScope approach is to sell excess production on a spot basis.

Generally offered in 30-45kt cargo sizes.

1 tonne of coke solids is equivalent to 1.30t coking coal

Types of coke solids produced

•Lump•Tata•Nut•Breeze

13

Coke Ovens Process

Coal is blended and charged into an oven

The coal is levelled to allow passage for the gas generated to exit

OVEN

DOORS

STANDPIPE

GAS PASSAGE

COAL MASS

After levelling

CHARGE HOLES

For Filling Oven with coal

CHUCK

DOOR

COLLECTOR

MAIN

OVEN

DOORS

14

Regenerators

• Air and gas are preheated by separate regenerators and the heat distributed across the refractories next to the oven wall

• The oven heats the coal for approx 19-20 hrs – driving off the volatiles, leaving behind relatively pure carbon (88%) + ash (10-12%) in what is termed coke.

• The surplus gas produced (Coke Ovens Gas (COG) and other by-products (Ammonium Sulphate, Benzene, Tar) are collected

• The coke is pushed from the oven and quenched with water

• Coke is then mixed with iron ore in the Blast Furnace to make iron

G

A

S

A

I

R

A

I

R

G

A

S

OV

EN

OV

EN

REFRACTORY BRICK - HEATED

Coal & Cokemaking Course March, 2010 15

What is Metallurgical Coke?

Desirable physical properties

• strong and large lumps

• withstand the blast furnace environment without generating fines

• an irregular shape, so that it doesn‟t pack tightly (permeability)

• very porous (react with Blast)

Chemical properties

• Low Sulphur & Phosphorus ( Steel quality)

• Low Ash (less slag, less fuel, lower hot metal cost)

Solid residue after pyrolysis of a coking coal• the coal is heated to >1000ºC in the absence of air

• largely carbon plus some hydrogen, nitrogen, sulphur and inorganic minerals

Coal & Cokemaking Course March, 2010 16

Coking and Non-Coking Coals

Only a limited range of coals are suitable for making metallurgical coke

• bituminous coals

• need to exhibit plasticity and swelling

• depending on the quality of the coke produced can be classified as hard, semi-hard, semi-soft or soft coking coals

Non-coking coals form a char when heated

• fine powder approximately the same size as the original coal

Key processes that form metallurgical coke during pyrolysis

• Softening, swelling (dilatation) and agglomeration

Binds individual coal particles into large lumps; feed coal typically 85% < 3.35 mm to coke with mean size 50 mm.

• Shrinkage

Affects coke size, strength and oven wall pressure (OWP) through the generation of fissures and micro-fissures

17

Push Side - 6 Battery

OVENS

RAM

REGENERATORS

18

Charger - 7 Battery

CHARGER

CHARGE HOLES

COKE WHARF

RAM

19

Coke Side - 7 Battery Coke Wharf

COKE

QUENCHER

20

Ironmaking Department

Sinter & RMH

5 BF

6BF

PCI

21

What we look for in IRON ORES

• High % Fe – yield of hot metal

• Low combined gangue (SiO2, Al2O3) = less slag volume (costs)

• Low Phosphorus (P) = quality of steel

• Low Loss on Ignition (LOI) – combined water = freight cost & fuel

• Low Specific Trace elements – Ti, V, Cr and alkali (Zn, K2O)

LUMPS ( Typically 61-64% Fe)

• As received from the Mine, has -6mm material which are

screened out and treated as Fines (“secondaries”). Yield

normally 72% Lump (+6mm)

• Remaining Lump Ore (+6 – 60mm) is direct charged to BF

• However difficult to control chemistry – comes as “Mother

Nature” including variability in SiO2, Al2O3, Phos, MgO,

CaO etc

• Therefore “non ideal” smelting in the BF – wide temperature range ; affects zones in BF

• Generally limited to < 20% of Burden mix, however in lower productivity scenarios can use higher

proportions

• Comes with penalty of increased slag volume (gangue) and fuel costs

22

What we look for in IRON ORES

FINES Typically (58-63% Fe) - South American exception @ 66%Fe

• Generally the cheapest, due to lower %Fe and higher gangue

• Not suitable for direct charge to Blast Furnace (too fine, gets blown out as dust)

• Requires agglomeration into larger solid forms such as Sinter or Pellet by :

o Blending the fine ores to control chemistry & size

23

Raw Materials Handling Area - Ore storage yards

Secondary Ore Blending yard facility 2 Beds (Each 300kt nominal capacity)

One variable speed Barrel Reclaimer

Bed consumed over 18 -20 days

24

What we look for in IRON ORES

FINES Typically (58-63%Fe) - South American exception @ 66%Fe

• Generally the cheapest, due to lower %Fe and higher gangue

• Not suitable for direct charge to Blast Furnace (too fine, gets blown out as dust)

• Requires agglomeration into larger solid forms such as Sinter or Pellet by:

• Blending the fine ores to control chemistry & size

• Then add fluxes (Limestone (CaCO3) & Dolomite (MgO) & Serpentine (SiO2; MgO)

• Add Fuels (Coke & Anthracite) and layered on a moving grate

25

Sintering Process

Air Suction

• Coke is ignited by Nat Gas Burner; and Air is sucked through the

material bed

• The Air and the Coke react to partially soften and reduce the

ferrous materials with the slag forming materials bonding

everything together into a sintered (Cooked) lump of Solid Sinter

MOVING GRATE

26

27

SINTER

28

Built

Revamped

1975

2009

Grate Area 480 m2

Production 6.6 Mtpa

Productivity 38-40 t/m2/d

BF Burden ~60 - 70%

No.3 Sinter Machine

Ore Preparation – Sinter & Raw Materials Handling

Zone 1 added to the Electro-Static Precipitators

New Strand Feeder and New Ignition Furnace

Strand Extended and New Cooler Feed Chute

Sinter Cooler – wider and more fan power

Higher Strand Pallets

Waste Gas Main & Spillage Conveyors extended

Recent Upgrades made to the No.3 Machine

30

31

IGNITION FURNACE

SINTER BED

32IGNITION FURNACE

STRAND

+

SINTER

DISCHARGE

33

ROTARY COOLERSINTER

34

What we look for in IRON ORES

PELLETS (65 - 67% Fe)

• Similar to Sintering process where fine ore is agglomerated into solid, lump material - pellets

• Generally the ores for pelletising are already very fine and soft and easier for grinding and balling

• i.e. Magnetites – generally too fine and also because of oxidised state, impede sinter bed

permeability

• Due to greater amount of grinding, balling and binding required, Pellets generally more

expensive to produce, however preparation allows improvement of grade, i.e. Increased % Fe

and lower gangue.

• Consequently selling price / tonne also more expensive

• Pellets generally used in High Productivity

scenarios, higher Fe yield - where high cost is

justifiable, however, first material to shed in

downturn scenario, due to cost.

• Typically used at between 10-20% of Burden Mix

(although some plants use at 50% – 80%)

35

Whyalla Fines

Sinter

Carajas Fines Yandi Fines

Savage River Pellets

FINE ORES

LUMP ORES

PREPARED BURDENS

Blended and Fluxed in

Sinter Machine to

Produce Sinter

BLAST FURNACE

PELLETS

Mt Newman Lump

Mt Newman Fines

Prefer: ≥ 80% Prepared Burden ≤ 20% Lump Ore

36

Ironmaking – Blast Furnaces

No.5BF No.6BF

Built 1972 1996

Relined 1978, 1991, 2009 -

Inner Vol – m3 3427 3208

Work Vol – m3 3000 (88%) 2749 (86%)

Campaign Life 18 - 20 yrs 20+ yrs

Output 2.7 Mtpa 2.7 Mtpa

No.5 Blast Furnace No.6 Blast Furnace

Combustion

Key Zones

850~950°C Upper Shaft

950 ~ 1200°C Lower Shaft

1200~1400°C Cohesive

>1400°C Deadman

2050-2250°C Raceway

Ind

irec

t R

edu

ctio

nD

irec

t R

edu

ctio

n

Hearth

1500°C

• Function of a Blast Furnace is to

• Remove Oxygen from Iron Oxide

• Remove gangue from the Iron Ore to form Slag

• This is achieved through the used of Carbon Monoxide gas from the combustion of Carbon from Coke & Coal

• There are key Zones in the BF

• Lumpy zone - still solid in Shaft

• Cohesive zone – start to soften

• Deadman – Coke & Liquids

• Raceway – Gas Reaction

• Hearth - Iron & Slag

Blast Furnace

2C + O2 2CO

Carbon Oxygen (Carbon Monoxide)

(Coke & PCI) (Air)

3 Fe2O3 + CO 2 Fe3O4 + CO2

Haematite Magnetite Carbon Dioxide

(Iron Ore, Sinter, Pellets)

Fe3O4 + CO 3 FeO + CO2

Wustite

FeO + CO Fe + CO2

Molten Iron

(All reactions occur at various stages & temperatures & pressures within the furnace)

38

Chemical Process

Raw materials , Lump Ore,

Sinter , Pellets, Coke & fluxes

Charged Through top of

furnace

Hot Air (including additional

Oxygen) i+ PCI s blown into

Furnace through Tuyeres.

Temp = 1200 Deg C

Pressure =370 Kpa

Velocity = 230 m/sec

Molten Iron drained from

taphole in side of furnace into

brick lined torpedo shaped

vessels.

Slag converted to either „sand-

like‟ particles in a Granulator or

„rock slag‟ when cooled in pits

Excess Hot gases flow from top

of Furnace to Gas Cleaning

Plant and reused for heating

Layers of Coke & Ferrous

Materials descend over 8

hrs to bottom of furnace –

soften then melt and collect

in the hearth

Carbon Refractory Lining

Cast Iron / Copper Stave

Cooling system

Blast Furnace Process

100 oC

2200 oC

1500 oC

40

SHAFT

BELLY

HEARTH

BOSHTUYERE CENTRELINE

TAPHOLE CENTRELINE

Working Volume (M3) =Volume from Tuyere Centreline

to Furnace Top

= SHAFT+BELLY+BOSH

Inner Volume (M3) =Volume from Taphole Centreline

to Furnace Top

= HEARTH + BOSH + BELLY +SHAFT

Working Volume = 85% - 89% of Inner Volume

• Size – BF are defined by Inner & Working Volumes

Differences in Blast Furnaces

Asia use t/d/m3 IVEurope use t/d/m3 WV

41

Differences in Blast Furnaces

• Size – BF are defined by Inner & Working Volumes• The size determines the output capability, expressed as Tonnes/day/m3 IV (or WV)

• Results > 2.1-2.2 t/d/m3IV is considered good and

• Campaign results of >10,000 – 12,000 t/m3IV are considered excellent

• i.e. on a 3400 m3IV BF = 41 Million tonnes during the campaign, over 15+ years

• Modernisation• Degree of modernisation determines productivity, efficiency, quality, reliability and ultimately cost/tonne

• Eg. Furnace Top pressure- structure designed to operate under much higher pressures – puts a back pressure

on the process, slows down the velocity of gas in the furnace, gas stays in furnace longer to undergo more

reaction = more production at lower fuel consumption

• No. of Casting floors – 1 versus 2, 3, 4. Capable of handling greater volumes of liquid production; continuous

casting – still operate the other CHF whilst repair & maintain others.

• Automation - Labour saving devices and equipment

• Degree of computer control, automation, monitoring and assessment – leads to greater product control, uptime

and asset life

• Skilled operators / engineers

• Raw Materials• Availability of high grade raw materials – strategic advantage vs. forced to use localised domestic low grade

materials requiring additional processing facilities and higher costs, product quality impact

(NZS is classic example – Titaniferous Ironsands, although not BF route)

42

Issues that impact Cost curve – different globally

Raw Materials - Coal, Iron Ores, Alloys & Scrap are single biggest contributor to Costs

Depending on proximity (freight) and quality, as well as ownership (JV partnerships)

Labour Costs – developing countries have lower cost of labour for both operations and

construction.

Statutory Compliance – Europe, Australia, Japan, Korea & Taiwan have significant

Government control and statutory requirements for both environmental & safety performance

– requiring greater technological facilities installed (greater Capex & Opex) as compared to

developing countries.

Exchange Rate – relativity of exchange rates will impact competitiveness