Integrated Annual Report 2014
The 2014 Newcastle blast furnace reline
Key to this report.

The 2014 Newcastle blast furnace reline

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By far the single biggest event to affect ArcelorMittal South Africa this year was the scheduled reline of Blast Furnace N5 at our Newcastle Works. Here we explain what the reline entailed, why it was necessary and what it means for the future of our company.

What exactly is a blast furnace?

Blast furnaces are at the very heart of the modern integrated steelmaking process (in fact, blast furnaces have been around for hundreds of years). Simply stated, a blast furnace uses solid fuel (coke) to turn iron ore into liquid allowing the separation of iron and gangue (commercially worthless material contained within the ore). Hot metal is further refined in a steel plant and mixed with alloys to produce steel in various shapes, sizes and specifications.

A blast furnace is a giant container into which iron ore, coke and limestone (the latter known as “flux”) are fed from the top. As gravity moves the material fed in from the top towards the bottom of the furnace, the material comes into contact with extremely hot air that has been blasted into the furnace through pipes near the bottom. Chemical reactions take place and the ore becomes molten before being tapped off from the furnace.

Why do blast furnaces need to be relined?

Newcastle N5 is a gigantic structure some 20 storeys or 100 metres high. (The “5” part of the furnace’s name recalls furnaces 1 to 4 which were located in the old Newcastle South Works but have since been demolished.)

A conveyor belt feeds the raw materials into the blast furnace where hot air (1 100° C) ignites the coke and provides the heat for the ore to be liquefied and reduced. A so-called off-gas system removes the gases and dust given off in the ironmaking process for further use as an energy source and as by-products. Around the blast furnace (which can produce 5 000 tonnes of hot metal per day) are three stoves which produce the extremely hot hair that is fed into the furnace.

Clearly, such intense heat would simply destroy the furnace if it were not properly protected with cooling elements and special refractory material.

Blast furnaces everywhere in the world operate 24 hours a day, 365 days a year. (Allowing them to cool down results in a solidified mass of iron that can only be removed with great difficulty while the process of reheating is a demanding, time-consuming and expensive exercise.) Obviously, such a continuous, intense smelting process causes wear and tear and the lining of refractory bricks and other cooling elements inevitably wear out. Which is why it is necessary to periodically reline a blast furnace.

The Newcastle furnace was last relined in 1993, with a partial reline being performed in 2008 after the end of the lining’s design life. Towards the end of the period between relines, a blast furnace’s efficiency starts to deteriorate – as began to happen at Newcastle; by 2014 a reline became imperative.

What did the Newcastle reline entail?

Detailed planning for the Newcastle reline began in 2012. This planning process involved senior plant management and multidisciplinary teams including professionals skilled in various engineering disciplines, finance, procurement, project management, construction, operations, health and safety. Experts from the ArcelorMittal group were consulted and shared their experience from literally dozens of similar relines done around the world.

The plant in northern KwaZulu-Natal has only one blast furnace, N5, and so, when the furnace is out of commission, the production of long steel products is seriously affected. Company management realised that it made financial sense for adjacent equipment and plants to undergo necessary repairs and improvements alongside the reline activities. This work included the refurbishment of critical steel plant equipment and also the reheating furnaces at the three secondary rolling mills where the final steel products are manufactured.

In total, the reline was projected to cost R1.8 billion. This amount was to be spent on the blast furnace proper, auxiliary tapping equipment, gas-cleaning plant and a total replacement of the electrical and control systems. The reline started on 12 May 2014 and was meant to last for 125 days. So metal stockpiles were built up over a period of a year to keep customers supplied; eventually a stockpile of some 500 000 tonnes was amassed, enough to

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meet demand, which typically runs to 100 000 tonnes per month.

As the days turned into weeks it soon became apparent, however, that the reline project was not going according to plan. Key deadlines began to be missed, insufficient shifts were planned and actually worked, and work packages took longer than expected (the process known as “lancing the bear” – cutting up the solidified very large lump of iron in the furnace – took 12 days against a projected five). Because work is concentrated in a defined, finite space, delays in performing one part of a relining process impact subsequent, other parts of the process.

The delay was due to various factors including poor performance of the main contractors, additional work that was underestimated at the start of the project and to a smaller extent some short bursts of industrial action. This underperformance was a particular disappointment as the contractor concerned had previously done exemplary work for ArcelorMittal South Africa. In particular, the skills of many of the 2 400 people employed to work on the project (at the work peak) were found to be lacking. Safety was another major concern with, tragically, one contractor employee dying on site and two individuals sustaining lost time injuries.

As one cannot peer inside a blast furnace when it is operating, once the reline process started, the project team realised that some work scope changes were necessary – these changes added approximately 25% to the delay. As the reline process dragged on, additional contractor and internal resources were deployed and ArcelorMittal South Africa staff, assisted by group colleagues, worked around the clock to minimise the damage and get N5 restarted.

Restarting the furnace began on 7 November, some seven weeks later than scheduled, at a cost of USD169 million which was within the approved budget.

However, within the first week, a newly installed main gearbox, operating the system that charges raw materials into the furnace, started cutting out. Despite having the supplier’s experts on site and intensive fault-finding exercises, this eventually resulted in the process having to be stopped and the furnace recovered from a chilled hearth condition. The source of the problem was subsequently identified and eliminated.

We immediately engaged with our customers to ascertain their needs so that we could put contingency plans in place to ensure delivery to most customers throughout December. Fortunately, the traditional December business slowdown helped to ease pressure on our plants and customer orders for January 2015 were not impacted. The furnace was successfully commissioned on 2 December although ramping-up to full capacity proved to be more difficult and time-consuming given complications relating to the chilled hearth condition.

While many painful lessons were learnt during the 2014 reline (chief among them the need for close and continued contractor supervision), the end result was a thoroughly modernised, much more efficient furnace that has an increased capacity – rising from 1.7Mtpa to 1.9Mtpa for approximately 20 years. In addition, the furnace will produce iron at a lower cost – the rebuild translating into an estimated energy saving of approximately R100 million per year.

The blast furnace in numbers

  • Project completed on 7 November 2014
  • Safety – 151 injuries (one fatality, two LTIs)
  • A total of 2.6 million man hours was worked on site (at peak 2 400 people on site – 50% local)
  • Project duration of 179 days was 54 days longer than the planned duration of 125 days:
    – Non-performance of contractors responsible for about 57% of the delay
    – Additional work contributed to 40% of the delay
    – Industrial action responsible for 3% of the delay
  • Project was completed within the budget of USD169 million
  • Furnace did experience some problems during the start-up but is currently at full capacity
  • AMSA imported billets and slit slabs at Vanderbijlpark to allow downstream manufacturing of long steel products at Newcastle to alleviate the shortage of steel to domestic customers created by the reline