The latest addition to the South Texas industrial landscape is The voestalpine Group, an Austrian steel-based technology and capital goods powerhouse that is a world leader in the manufacturing, processing and development of sophisticated steel products. The company supplies the automotive, railway, aviation and energy industry. The voestalpine Group is the low emission benchmark in Europe.
With 500 group companies and locations in more than 50 countries and on all five continents, the group has approximately 46,400 employees. Currently under construction, voestalpine-Texas, located in San Patricio County, Texas, just outside of Corpus Christi, the sixth-largest deep water port in the United States, will supply its sister companies and selected third parties with 2 million metric tons of hot briquetted iron (HBI) for the manufacture of high-quality steel products for the automotive, railway, aviation and energy industries.
HBI is comparable to the highest quality scrap or pig iron. The plant’s site encompasses some 500 acres at the La Quinta Trade Gateway, adjacent to Corpus Christi Bay. It is the largest foreign investment in the group’s history to date.
voestalpine-Texas chose San Patricio County for its latest direct reduction plant because of the proximity and price of natural gas from the Eagle Ford Shale, just 60 miles away. Natural gas is a key component of the manufacturing process of HBIs and direct reduced iron (DRI). The company will consume 23 million MMBTUs of natural gas annually in the manufacturing process.
The process also will require the use of 6 million gallons of makeup water, 80 percent of which is seawater, per day, which is circulated through titanium heat exchanges, a sustainable process. The use of seawater from Corpus Christi Bay will meet the cooling and process water needs while avoiding negative impacts to the scarce freshwater resources protected by the state water plan. Seawater is returned to Corpus Christi Bay with a remarkable 1.2 degree variance in temperature between intake and output.
Availability from Canada and Brazil of raw material, namely iron oxide ore pellets, the ability to reduce shipping traffic by 45 percent, and an ample, available supply of seawater used in the manufacturing process and an educated workforce also were a vital part of the decision to locate the $740 million plant in South Texas. Added bonuses were the stable business and legal climate of the region. voestalpine Group is a risk aware company.
“We also analyzed the huge advantage in labor costs the company would gain by locating in the USA, not in wages but in taxes,” says Matthias Pastl, head of corporate communications and environmental management. “Our tax responsibility for employees in Austria is far greater.” The project will create around 1,400 construction jobs, with an anticipated workforce of 150 permanent employees when the plant begins producing in early 2016.
“Half of the production volume will be shipped to our existing Austrian steel mills in Linz and Donawitz for the production of sophisticated steel grades. The remainder will serve as a strategic reserve and will also be sold to partners interested in longer-term contracts,” says Wolfgang Eder, chairman of the management board of voestalpine AG, and head of voestalpine’s Steel Division.
“In the USA, we can access energy cost efficiently and operate in a politically stable, predictable environment,” Eder explains. “This investment also provides the voestalpine Group an additional growth option in North America over the long term.” voestalpine-Texas is expected to generate a $650 million economic impact to the region.
“We involved the community and environmental groups in the plant design,” Pastl says, “and I am proud to say voestalpine-Texas was the first heavy industrial greenfield project in Texas to have weathered the permitting process without opposition from the environmental community.
“Our commitment is to sustainability of the environment through responsible stewardship of natural resources, flora and fauna, maintaining air and water quality, as well as reducing our footprint worldwide.” The company recently received its Texas Commission on Environmental Quality (TCEQ) air and its EPA greenhouse emission permits. voestalpine-Texas will recycle 97 percent of its materials, from iron ore dust to pellets to HBIs.
All iron ore pellets are contained in fully enclosed storage facilities to avoid disbursement of iron ore dust in the air. Containment is not required by law, but voestalpine-Texas voluntarily erected costly storage facilities to align with its corporate commitment to the environment and the community.
The natural gas-fueled process of manufacturing HBIs and DRI in an environmentally responsible manner is easily understood. It is the modern and green alternative to coke-based blast furnaces. The direct reduction plant only uses natural gas as the reducing agent, a much more environmentally friendly alternative to coke-based blast furnaces. Iron ore pellets that are 65 percent pure are fed through a process into a sealed low-pressure reduction reactor, and reduced to metallic iron by a reducing agent created from natural gas, which strips out and removes the oxygen in the pellets, and compresses them into palm-sized, cushion-shaped HBIs of 91 percent purity.
Only 10 percent of the natural gas used in the process is burned. Saltwater circulates through titanium exchangers to cool the primary cooling system. It is then filtered and returned to Corpus Christi Bay. Direct reduction is the safest way of iron making, as the iron is not in a molten state, making it easier and safer to handle.
HBIs are then stacked in the holds of ships and transported to their final destinations in Europe, Mexico and other regions. The premium feedstock for steel production is in high demand. The majority of the available production volume is already under long-term contracts. voestalpine-Texas expects that the plant’s production volume will be fully sold out by start of operation in early 2016.
voestalpine Group manufactures premium products for premium clients with corporate worldwide revenues of 12.1 billion euros. Approximately 8 percent of its revenues are generated in its USA facilities and expected to grow substantially when the Texas plant begins operations. The nearest competitor by volume to voestalpine-Texas is in Venezuela, where the pricing for HBI is regulated.