DRI in the USA

While most direct-reduced iron plants are sited overseas, American Iron Reduction’s new facility in Louisiana shows how making DRI can be as American as pecan pie.

By Eileen Zagone
Eileen Zagone is an associate editor for Scrap.

Rising out of the vast fields of vibrant green sugar cane that define the landscape of southern Louisiana is a plant that specializes in a decidedly different product than sugar: direct-reduced iron (DRI), a scrap complement made from virgin iron oxide.

This facility sits near the mighty Mississippi River in Convent, La., just upriver from New Orleans. The plant, owned by American Iron Reduction (AIR), is novel not only in Louisiana, but in the United States as a whole—it’s one of only three DRI production operations in the country, the first domestic plant having opened more than 25 years ago. The explanation behind the select group of DRI plants is simple: DRI production requires access to sizable quantities of natural gas and iron oxide at reasonable prices, resources which generally are more abundant and cheaper in foreign countries, especially India, Venezuela, and Mexico.

Equally noteworthy is the fact that AIR is a joint venture between two U.S. steel producers—GS Industries Inc. (Charlotte, N.C.), parent company of Georgetown Steel Corp. and owner/operator of the first U.S. DRI plant, and Birmingham Steel Corp. (Birmingham, Ala.). The two companies came together on the project to supply their own needs for DRI as well as to sell the raw material to other steel mills in the United States.

David Durnovich, the plant’s COO and a veteran of 14 other DRI production facilities around the world, says the two steelmakers expect scrap complements to play an increasingly important role in the mill mix. Plus, Birmingham Steel, which has traditionally produced rebar, now wants to enter higher-grade niche markets, he says. The company felt having its own DRI plant would enable it to produce a high-grade finished product without having to rely solely on supplies of high-grade ferrous scrap. Both GS Industries and Birmingham Steel “are big believers in alternative iron as an important part of the future of their businesses,” Durnovich 
asserts. 

AIR currently ships DRI throughout the country to minimills operated by the joint partners—especially Birmingham Steel’s mills in Memphis, Jackson, Miss., Cartersville, Ga., and Kankakee, Ill., and Georgetown Steel’s plants in Kansas City, Mo., and Georgetown, S.C.—as well as to independent steel producers.

So far, the investment appears to be panning out: The $185-million facility, which uses a DRI production system designed by Midrex Direct Reduction Corp. (Charlotte, N.C.), came in under budget and ahead of schedule. And production is pretty much on track as well, considering that this startup year for AIR also saw record temperatures throughout the southeastern United States that resulted in a number of power curtailments. The facility, which is designed to produce 1.2 million mt of DRI annually, is shooting to produce 960,000 mt by year’s end. Looked at another way, the plant can produce 150 mt an hour of DRI, says Durnovich. It’s already operating in the 150 mt per hour range and has occasionally increased production to around 180 mt an hour. 

From Construction to Production

When GS Industries and Birmingham Steel started looking for sites for their DRI plant, access to natural gas lines was vital. Natural gas accounts for more than 85 percent of AIR’s energy, and the plant is already the second-largest natural gas consumer in Louisiana. Fortunately, the operation’s 27-acre greenfield site in Convent had ready and economical access to several gas lines. Equally important, it offered deep-water access via the Mississippi River for receiving iron oxide—its raw material—and shipping finished DRI.

Construction began in June 1996 and continued through mid-January 1998 when the new plant produced its first DRI. The project presented several unique challenges, says Durnovich. For starters, the water table at the plant is just 4 feet below the surface. That meant the facility’s water-clarifying system—made of concrete and steel—had to extend 60 feet underground. 

And while the plant isn’t particularly large by Durnovich’s standards, it is tall. To save time and increase safety during construction, the plant’s soaring 287-foot-tall shaft furnace tower was built one level at a time—each segment was completed before the work crews moved up to the next level. At the peak of construction, Durnovich notes, there were 900 employees building the plant.

Ironically, less than one-tenth as many employees are needed to run the facility. The site employs only 71, including administrative personnel. In fact, even though the facility runs 24 hours a day, seven days a week, only 12 production employees are needed each shift. That’s because most of the plant is operated from the control room, where a computer keeps track of every minute detail of the plant’s operation, explains Nestor Gomez, production manager. With the touch of a few computer keys, AIR staff can access information about any stage of the process, Gomez says, noting that the computer system can visually zoom in and out of the different areas of the plant and provide all manner of information, from temperatures to production levels.

The team that runs the plant is a mix of DRI industry veterans and specially trained employees from the community. Collectively, says Durnovich, the new employees underwent 847 man-hours of training to prepare for working at the plant. Training was conducted at Georgetown Steel’s DRI facility in South Carolina and on-site in Convent with a Midrex startup team.

Driving the DRI Process

The direct-reduction process may be large in scale, but it’s fairly straightforward, says David Wood, AIR’s marketing and sales manager.

The first step begins with iron oxide, the raw material for making DRI. AIR gets most of its iron oxide—about 2 million mt a year—from three different Brazilian sources and one Canadian source in pellet or lump form. “These are the top-four suppliers in the world,” says Durnovich, who explains that about 11/2 mt of iron oxide are needed to make 1 mt of DRI. The half ton that’s lost is actually oxygen released from the material during the process, he says.

The iron oxide is stored in 3,000-mt-capacity silos before entering the DRI process. The pellets are blended together to ensure a mixed feed enters the furnace; then, a vertical conveyor carries the pellets to the top of the shaft furnace and feeds them into the direct-reduction process. While many DRI production plants use a 45o conveyor to feed the furnace, AIR chose a vertical approach to reduce capital and construction costs. Another advantage of the vertical system is that it has fewer moving parts.

As the oxide pellets are fed into the vertical-shaft furnace at a rate of about 230 mt an hour, gravity conveys the material down through the reduction process. Oxygen is freed from iron by an extremely hot—about 2,000oF—counterflowing reducing gas generated by the plant’s reformer, which is composed of 450 10-inch-diameter tubes. The reduced iron then moves down to a cooling zone in the shaft furnace, where another counterflowing gas cools the DRI and boosts its carbon content. Then the DRI is discharged from the bottom of the furnace.

To increase efficiency, heat and gas are recovered and reused throughout the process. 

Water from the Mississippi River that’s used in the DRI production process is cleaned, then either reused or returned to the river. Most of the water is recirculated, but AIR has a water treatment system that continually checks the water being discharged to make sure it meets environmental standards. Although the plant has state-of-the-art environmental controls, Wood stresses that environmental problems aren’t inherent to the DRI production process.

Old Man River and Rail

Between the Mississippi and AIR’s facility is the Illinois Central RailMarine Terminal (IC), a sophisticated shipping facility that’s reportedly the only site on the Big Muddy capable of directly transferring bulk cargo from ships and barges to railcars. Though it’s designed specifically to handle AIR’s material—both incoming iron oxide and outbound DRI—the IC terminal is an independent company that opened just before AIR began production. Currently, AIR is the site’s largest customer, providing about 60 percent of its business.

The 180-acre IC site operates 24 hours a day, with 336 dedicated railcars that were strengthened to handle AIR’s heavy-duty DRI. When the iron oxide arrives from Brazil and Canada, mostly by barge, IC unloads and stores the material until AIR is ready for it. Then, aboveground conveyors move the iron oxide to AIR’s storage silos. After conversion into DRI, the finished product is conveyed back to IC’s facility for shipment by rail or barge, with the two methods about equally split in usage. All DRI is shipped in covered vessels, barges, or railcars to keep the material dry and prevent reoxidation.

Complement or Competition?

So how will having this new DRI plant in full swing affect domestic scrap processors and minimills? For starters, Durnovich and Wood stress that DRI is a complement to scrap, not a substitute for it. Nor do they anticipate a scrap shortage. “We just think there may be a shortage of high-quality scrap to meet some mills’ tight specifications,” says Durnovich.

In fact, greater domestic DRI production could be good news for scrap processors, they say, because as minimills around the globe proliferate, their need for infeed material will increase. If these mills can use a broader range of scrap by boosting the quality of their mix with DRI and other complements, demand for all grades of scrap—including the lower grades—will continue to be healthy, Durnovich says.

For steelmakers, the news is also good. In particular, mills that produce high-quality products such as rolled steel have tight specifications. Adding scrap complements to their scrap mix can help them meet those specifications.

Steelmakers require their DRI to be as free of metallic residuals as possible, explains Durnovich. AIR produces DRI with 94 percent metallization and 1.8 percent carbon, which is better than the typical industry levels of 92 percent metallization and 0.5 to 1 percent carbon, he says, asserting, “This is a big selling point for us.”

Another advantage of the AIR facility is that it can “provide a level of service that isn’t possible from an overseas location,” Durnovich says. For example, steel mills that purchase DRI from an offshore producer usually must buy the material in huge quantities and keep a large inventory on hand, Wood says. But because of its location and shipping options, AIR can send a mill exactly the amount it needs, right when the material is needed, which enables the mill to charge the DRI directly into its melt rather than having to store the raw material.

Poised for Expansion

So far, AIR hasn’t had much of an effect on the other major DRI producers supplying the U.S. market, most of which are in Venezuela, Durnovich says. 

But that doesn’t mean the plant won’t make a bigger mark in the future. After all, while still in its first year of operation, the Convent facility has already proved that it could significantly increase its DRI production. In fact, the plant could reach 1.5 million mt a year within the next few years, Durnovich says, though he concedes that market conditions don’t favor increased production now.

When scrap prices are low, as they have been, mills would rather purchase scrap than pay more for DRI, he notes. And since the production costs for making DRI are fairly constant, the price has to stay above a certain level, too, or selling the material becomes a losing proposition. Fortunately, Durnovich and Wood have experience with the ebb and flow of the global markets, which enables them to take the current market downturn in stride.

In the short term, says Durnovich, the market may be depressed, but he knows it won’t always be that way. “In the long run,” he predicts, “things look good for DRI and electric steel production. It’s just the nature of the industry that we have more of a fixed price than scrap suppliers to steel mills. But on the bright side, we don’t see how anything could stop the electric steelmaking trend.”

In the interim, the plant is focused on efficiently producing a high-grade product for its consumers while educating the steel industry on the advantages of adding DRI to the scrap mix. And when market conditions become more favorable, AIR will be ready to expand: The Convent site already has the permits to build a duplicate DRI module next to its current one, a move that would double the firm’s size and capacity. That would add not only one more landmark in the sugar cane fields of southern Louisiana, but also a stronger presence for DRI production—and AIR—in the United States. •