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Overview of the Iron and Steel Industry in Nigeria. BY Dr David A. Aderibigbe i3M Power Systems Ltd Plot 1E, Ligali Ayorinde Street Victoria Island, Lagos . Schematic of Iron- and Steel- making Operations. Iron and Steel Processing Operations.

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Overview of the Iron and Steel Industry in Nigeria

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Overview of the iron and steel industry in nigeria l.jpg

Overview of the Iron and Steel Industry in Nigeria

BY

Dr David A. Aderibigbe

i3M Power Systems Ltd

Plot 1E, Ligali Ayorinde Street

Victoria Island, Lagos


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Schematic of Iron- and Steel- making Operations


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Iron and Steel Processing Operations

  • There are basically five (5) stages in the iron and steel processing operations by which raw materials are to be converted to finished steel products. These are:

  • (i) Raw Materials preparation and Coke Making.

  • (ii)  Iron Making.

  • (iii) Steel Making.

  • (iv) Continuous Casting or Continuous Rolling.

  • (e) Finishing Operations.

  • The first four stages are usually called the PRIMARY END while the last stage is termed the FINISHING END. Fig. 1 is a schematic of the operational sequence of the Nigerian Iron and Steel Industry


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RAW MATERIALS PREPARATION AND COKE MAKING

  • The major raw materials required for the Primary end of Iron making are Iron Ore and Limestone.

    NATIONAL IRON ORE MINING PROJECT (NIOMP)

  • The National Iron Ore Mining Project (NIOMP) at Itakpe is earmarked to supply the total 2.155 million tons per year iron ore requirement of the Ajaokuta Steel Project. In addition, it is contemplated that the project would also supply about 40% of the requirement of the Delta Steel Company for super-concentrate iron ore fines (grading 68% Fe) which were largely imported from Brazil.

  • Also, contract for the provision of railway line from Ajaokuta to Warri was only executed over a portion of the over 200km distance. Thus, there is no existing provision for cost-effective bulk transportation of iron ore super-concentrate from Itakpe to Delta Steel Company.

  • Some of the major constraints to full plant operation at NIOMP include:

  • · - Inadequacy and low availability of mining equipment, support facilities, spare parts and consumables, such as explosives.

  • - Non-completion of the 4th beneficiation line that will produce super-concentrate for DSC.


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RAW MATERIALS PREPARATION AND COKE MAKING (contd)

Ajaokuta Steel Company Ltd. (ASCL)

  • ASCL is an integrated blast furnace/basic oxygen furnace steel plant with a designed capacity of 1.3 million tonnes of cast blooms per year, currently under construction. The project is being executed under a contract agreement signed in 1979 with Tiajpromexport of the former USSR (now Lengipromez of Russia)

  • Under the first phase of development, on-going for the past 20 years, the plant is expected to produce bars, and light medium sections. Many of the facilities of the plant have been completed with the exception of the coke ovens, blast furnace and BOF, which are still to be completed. Thus, at the moment, the plant has no liquid steel making capability.

  • When completed, the product mix of the plant is expected to cover the following:

    Product Tonnes (per annum)

    I) Wire Rods (5.5mm - 12mm) 130,000

    ii) Bars (16mm - 32mm)200,000

    iii) Light Section 200,000

    iv) Medium Section 560,000

    v) Billets (for sale to third parties) 95,000


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RAW MATERIALS PREPARATION AND COKE MAKING (contd)

Ajaokuta Steel Company Ltd. (contd.)

SINTER FEED

  • The Itakpe Iron Ore Project can supply the Iron Ore Sinter feed requirement of the Ajaokuta Steel Plant especially with the commissioning of the 52km railway line between Itakpe and Ajaokuta.

    LIMESTONE

  • The supply of Limestone from Jakura to Ajaokuta should also not be a problem if the 40km access road from Lokoja to the Jakura Hill is properly rehabilitated.

    COKING COAL

  • The major problem is the supply of Coking Coal to Ajaokuta. Coking Coal has not been found in Nigeria in both quality and quantity. Therefore about 1.3 million tons of coking coal required per year for the Phase 1 of Ajaokuta must be imported to produce Metallurgical grade Coke for the operation of its Blast Furnace.


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RAW MATERIALS PREPARATION AND COKE MAKING (contd)

Ajaokuta Steel Company Ltd. (contd.)

COKING COAL REQUIREMENT

  • It is important to emphasize the three basic functions of Metallurgical Coke in an Iron Blast Furnace:

    ·Fuel to provide the heat for melting;

    . Source of reducing agent and

    ·       The provision of a permeable support bed for the charge and molten metal.

  • The implication of these functions is that the amount of metallurgical coke required for the operations of the Blast Furnace is not dependent on the capacity utilization for iron ore sinter feed for the production of molten pig iron. Therefore, it may reasonably be seen that whether the furnace operates at 10%, 30%, 60% or 100% capacity utilization, the amount of metallurgical coke required may be about the same for all practical purposes. As a matter of fact the coke rate, which is the amount of Metallurgical Coke that is consumed per ton of liquid iron produced is a design parameter for the blast furnace. To do otherwise is to expect instability in the process metallurgy that takes place in the Blast Furnace.


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RAW MATERIALS PREPARATION AND COKE MAKING (contd)

Ajaokuta Steel Company Ltd. (contd.)

COKING COAL REQUIREMENT (contd.)

  • Also, it is important to note that coking coal blends of between 3 and 4 sources are usually combined after satisfactory pilot plant carbonization and other tests for feed in the coke oven battery to produce metallurgical coke. The storage life of coking coal is also very short with deterioration in properties common within four months of storage. On the other hand, availability of coke-oven product of metallurgical coke is very scarce in the world market. Thus, Nigeria needs a supplier that will guarantee the regular availability of quality Coking Coal in a long-term contract (10 –15 years).

  • Furthermore, both the Coke Oven Plant and the Iron Blast Furnace require continuous operations (24 hours per day) for at least five (5) years (i.e. one campaign Life of the Furnace). Any shut down within this period (as a result of unsustainable production) will result in the destruction of the two facilities. The overall consequence will be an enormous financial loss to the Nigerian government with the attendant set back in the Iron and Steel development in Ajaokuta.


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RAW MATERIALS PREPARATION AND COKE MAKING (contd)

Ajaokuta Steel Company Ltd. (contd.)

COKING COAL REQUIREMENT (contd.)

  • More importantly is the capacity of the Nigerian Government to sustain the provision of the necessary foreign exchange (every year for at least five years) to import the coking coal. Assuming that the Federal Government of Nigeria is able to identify two or more sources for the long term (10 – 15 years) supply of coking coal, Table 2-2 shows the sensitivity of the financial outlay for importing coking coal (alone) to the exchange rate of the Naira to the U.S. dollar.

Thus, for Nigeria to import coking coal alone for a landing cost at Ajaokuta of about U.S.$150/ton the country requires 23.400 billion Naira (at U.S.$1 = N 120.00) per year and for five (5) years, this amount is N 117.00 billion. This amount must be guaranteed by the Nigerian Government as part of the working capital of the plant( in foreign exchange) in order to have sustainable production of steel at Ajaokuta (in one campaign life of the blast furnace).


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Economic Viability of Ajaokuta in the 21st Century

  • In 1976 when the Naira was exchanged for about U.S.$1.7, the operating cost of the furnace that required an annual capital outlay of about N0.117 billion for Coking coal alone was considered economically justifiable. This was also true as of 1988 when the exchange rate was about N10 (ten Naira) to the dollar. One is not sure that the same assumption of economic viability is valid in the year 2008 with the exchange rate of about N 120.00 to the U.S. dollar.

    This is why it is imperative for the completion of the Ajaokuta Phase I project to clarify through an independent study by reputable professionals (both local and international) the following issues:

  • -  the Cost-Benefit Analysis of the Technology Choice of replacing the Blast Furnace process with the Direct Reduction Process or similar process that will utilize the locally available raw materials (e.g. limestone and iron ore) and fuel (e.g. coal, gas and electric power). It should be noted that gas is already available at Ajaokuta and the iron ore at Itakpe is nearer Ajaokuta than Warri.

  • -   identification and evaluation of the sources for the long-term (15 to 20 years) supply of high grade Coking coal and the commitment by the Federal Government of Nigeria to enter into a long term contract for the supply of same to Ajaokuta.

  • -    the current state of the Market structure for the demand and the supply of iron and steel products (both long and flat) in both domestic and international markets.


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Steel Industry Related Infrastructure and Government Policy Issues

Infrastructure/Utilities Supply

  • Adequate and efficient infrastructure facilities and the supply of reliable utilities are mandatory requirements before the steel industry in Nigeria can attain its full potential in the production of competitive iron and steel products for both domestic and international markets.

  • On the basis of the nominal production at each steel plant, the following quantities of materials (shown below) are expected to be transported to and from each plant:


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Road Networks

Current Status and Concerns

  • In general, Nigeria has a reasonably good network of roads linking the major towns and cities. However, transportation of bulk steel-related materials by road may do damage to the roads and may not be the most efficient manner of moving the goods. For example, transporting 690,000 tonnes of billets per year by road from DSC to the Inland Rolling Mills requires a trailer to leave DSC every eleven (11) minutes around the clock.

  • Of particular concern is the access road to the sites for some of the major mineral deposits that are required in the steel industry. The following access roads and concerns need to be given attention:

    - Access Road to Jakura Limestone Deposit in Kogi state (45 km)

    - Link Road from Osara Dolomite Deposit in Kogi state to Itakpe rail line (10km)

    - Access Road to Onibode refractory clay deposit in Ogun state (20km)


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Rail Transportation

Itakpe – Ajaokuta – Warri Rail Link

  • The status of the Itakpe-Ajaokuta-Warri standard gauge rail link may be summarized as follow:

    -The 51km Itakpe – Ajaokuta iron ore transfer rail line has been completed by Julius Berger, the contractor.

    -The contract for the 270km Ajaokuta – Warri rail line is under implementation. The line is expected to be extended to Warri port.

    Concerns

  • -The specifications and the completion time for the Terminus facilities within the DSC plant.

  • -The specifications and the completion time for the supply of the rolling stock.

  • -The connection and extension of the Itakpe – Ajaokuta – Warri rail line to the narrow gauge railway track of the Nigerian Railway Corporation (NRC). For example:

    • ·      the Ajaokuta to Oturkpo (Benue State) extension (~202km)

    • ·      the Itakpe to Baro (Niger State) extension (~115km)


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Power and Utilities

Current Status

  • The provision of adequate and dependable supply of quality electric power and other sources of energy (e.g., gas and coke) is an important parameter in the operation and competitiveness of any steel plant. Furthermore, the availability of low cost reliable power is necessary for the development of the downstream industries and the economy in general.

  • The current combined electric power demand of the public sector steel plants (excluding Ajaokuta) is about 380MVA. Commissioning of the Ajaokuta plant is expected to add another 250MVA to the demand.

  • The following captive power plants exist in some of the steel plants:

    • -      2x55MW (110MW) at Ajaokuta Steel Plant

    • -      5.1MVA emergency power generator at Jos Steel Rolling Mill

    • -      27MW plant at the Katsina Steel Rolling Company

    • -      16MVA (4x4MVA) and 8x1.2MVA emergency power generators at DSC


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Power and Utilities(contd.)

Current Status

  • The PHCN currently supplies electric power to the Steel Plants through the

    following transmission grid system:

  • -Two (2) 330KV lines feeding the Delta Steel Company, each from the Delta Power Station (at Ughelli) and the Sapele Power Station.

    Ø      - One (1) 132KV line feeding Ajaokuta from Benin 330 KV line

    Ø      - Itakpe is connected to the 132 KV Itakpe/Ajaokuta transmission line

  • The Delta Steel Company has two (2) electric arc furnaces (each 110 tonne

    capacity and each consuming about 40MW).

  • There is supply of natural gas to both the DSC and the Ajaokuta Steel Plants.


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Power and Utilities(contd.)

Concerns

  • Although PHCN may be able to meet the electric power demand of the steel plants, we think that the reliability of supply still needs to be improved upon. For example, frequency fluctuation on the National grid can damage sensitive electrical control systems in the plant .At the time of visiting with a PHCN official the frequency meter on his table was reading 51.08Hz. This is outside the permissible fluctuation range for a number of electrical control systems in a steel plant ( i.e. frequency, 1.5%; voltage, 10% )

    Ø


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Thank you all for your attention!!!


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