Alton “Scotty” Newell III President Newell Recycling Equipment LLC

1. UK Electric Steel MakersDarlington, UK5 to 6th May 2017“The True Value of Shredded Steel when Used in EAF Steel production” Alton “Scotty” Newell III President Newell Recycling Equipment LLC

2. My name is Alton Scott Newell III and my friends call me “Scotty”. I am proud that my Grandfather, Alton Scott Newell Sr. invented the modern shredding machine, which our family started operating in 1961 in San Antonio, Texas. During 1962 my father Alton Scott Newell Jr, helped by his father built the 2nd Newell shredding machine at the Newell Recycling scrap plant in Phoenix, Arizona. Newell then added 3 more shredders, one to El Paso, Austin, and Dallas, Texas.

3. The Newell scrap yards were successful and other friends in the business came to us and asked us to build a machine for them. • Lindemann, who at the time were the world’s largest manufacturers of scrap processing equipment came to us and asked for a license to build according to our patents. • We did enter an agreement with Lindemann that lasted for more than 17 years, then we sold to Lindemann the right to use our information into the future while we began to compete with them.

4. As a result, we began to sell shredding plants all around the world and by the 1990’s Newell was responsible for almost all of shredders that could process an automobile. • The Newell family continued to operate shredding plants and the lessons learned there and the evolutionary changes made while maximizing profits are built into every new machine produced. • In recent years, Newell family owned shredders have been producing more than 1,000,000 tons per year so we have plenty of motivation to find better ways to do things.

5. US PATENT # 3482788 AInventor Alton Newell Filed 1965 Granted 1969

6. The First Newell Shredder that was wide able to shred a compete auto body.

7. The Introduction of the Auto Shredder Changed the Recycling Industry around the World. • In 1994, The American Society of Mechanical Engineers, designated the Newell Shredder as a the 111th National Historic Mechanical Engineering Landmark. • This award is given to inventions and developments that change an industry. “An ASME Landmark represents a progressive step in the evolution of mechanical engineering.”

11. Now there are more than 914 shredders in the world! • How did it happen that these machines invented and first used in a relatively small town in Texas, came to change an industry and scrap processing around the world? • The answer is simple. Shredding adds more more value to the product than the cost of making the product. • A more complex question is how does shredding add value and what are the evolutionary changes that have allowed the value of shredding continue to grow and expand? • From that small shredder in an earlier photo, the shredder has developed into larger and stronger and more productive machines that process a wider range of scrap efficiently. Today’s machines not only shredded automobiles and appliances but many types of heavier scrap steel.

12. 124 SXS Newell Shredding plant with 10,000 HP capable of producing more than 1,000,000 tons per year of shredded steel scrap.

13. The plant features a split downstream before the magnetic separation and then a further split to 4 picking conveyors before the final stacking conveyor.

14. Final stacking conveyor which in this picture has more than 500 tons per hour being carried.

15. This plant has an extensive collection system for the non ferrous metals which will be processed off line from the shredder plant.

16. Types of scrap that will be shredded:

17. In America, today we shred about 40% of all of the scrap consumed. The percentage in other developed countries is about 20% and it is very low in developing countries. • We predict that there will be a doubling of the present number of shredders as the true value of shredded scrap is recognized. • The world free market places a high value on shredded scrap and we believe that that value will only increase. • Not only does shredded scrap have a higher “value in use” than other types of scrap, shredding allows for the capture of value of nonferrous metals and it reduces the labor required to process scrap so that even in very low wage countries, it is more economical to shred. • There is also a large amount of work being done to improve the chemistry of shredded steel scrap, including the production of lower residual copper scrap. • Shredded scrap is also finding great value in use as cooling scrap which reduces cost at the steel works in allowing shredded material to be added to ladles to reduce cooling time and to gain more melt weight without additional costs.

18. To understand the true value of shredded scrap, don’t measure scrap cost going into the furnace!

19. Measure the cost of the molten metal in the ladle to determine “value in use”.

20. “Value in Use” means that the cost for the scrap should not be measured by the cost per ton of scrap going into the furnace but rather by the cost per ton of the molten steel being poured from the furnace. We believe that the value in use of shredded steel scrap produces the lowest cost per ton for the steel being produce. This is the primary marketing tool available to shredded scrap sellers. It seems to be working as steel mills around the world in the free market value shredded scrap above other types of premium scrap.

21. The following Series of Slides were provided by Andreas Albuja, the manager of ADELCA steel mill, located in Quito Ecuador. I think that in another life, Andreas would have been a university professor as he is very capable of collecting and explaining complicated data very clearly. This is the most important real data that I have ever been able to find that accurately explains “Value in Use” for shredded scrap in EAF operations.

22. Meltshop ADELCA`S SUCCESS • I want to present some conclusions regarding the use of shredder scrap as the main source for steel production. THE COMPANY • ADELCA is the most important Ecuadorian Steel maker placed near Quito, Ecuador, South America. • Currently producing 300.000 tpy of rebar and small shapes. Besides, it has a cold drawing plant for 60.000 tpy of all type of wire products. THE MELTSHOP • In 2006, Adelca signed with Sider Engineneering (Udine-Italy) the 160.000 tpy meltshop and started up on July,2008

23. Meltshop • As every new participant, Adelca began operation focused in the figures related with the process, but not in the scrap (60% of total cost) THE ECUADORIAN SCRAP

24. Meltshop ADELCA`S MIX PRESSED&SHEAR AND BUNDLE SCRAP

25. Meltshop SCRAP MIX • Low density. • Dirty scrap.

26. Meltshop THE NEW SCRAP MIX • High density. • Clean scrap.

27. Meltshop THE NEW Operation

28. Adelca calculate that the use of shredded scrap has saved $35 to $40 in direct costs per billet ton of material produced. • In addition to the direct cost savings, Adelca increased monthly tons of production by almost 100%. The effect of this increase of production is a huge increase in the return on investment of money, time and energy. • It is almost like buying a new melting facility to double capacity for no investment cost and saving $40 per ton on melting at the same time.

29. Other ways to increase the value of shredded scrap. • Cooling Scrap • Cooling and degassing scrap are both added value shredded scrap that are created by shredding known chemistry analysis scrap to very high densities. • Low copper residual scrap • Production of low copper residual scrap is more complicated and requires more careful procedures. Although the shredder is not strictly an example of GIGO (garbage in garbage out) there is some relevance to what is put into the shredder and what comes out of the shredder. In general, it is possible to put low grade scrap material into a shredder and to produce a much higher grade of finished scrap product. • An automobile or an appliance are examples of putting something into the shredder plant that has 20% waste material contained and to remove it by shredding.

30. Today’s large shredding machines process many types of scrap, each one with a potentially different copper residual. • Engine blocks have 0.70 to 1.0 Cu contained and powder metallurgy which is now producing some gears and other special parts have as much as 7.0 % copper. • We know for example that many long products such as rebar can have as much as 0.40 points of copper that is intrinsic to the alloy. Automobiles have a lot of sheet steel that has 0.06 copper but automobiles also have countless amounts of copper wire and small electric motors. • Therefore, one of the ways to produce lower copper residuals is to choose the type of material to be shredded. For example, shredding new plate clips of known alloy, or shredding a truck load of automobile wheels is another example.

31. While shredding known analysis material is a great way to produce low copper residual shredded material, the bigger challenge is to find ways to separate material after it has been shredded. • The following are a few of the methods that are presently being utilized. • There are machines in the market place that can detect and measure the amount of copper passing a certain point on a conveyor. While this does not remove the copper, it does allow a producer to run a campaign and to guarantee the copper content of 500 or 1000 tons. This does not lower the content but does measure it. • Shredding normal scrap to 10 to 15 pounds per cubic foot higher density will reduce the copper content by about 0.10 points. This means that the scrap will move from about 0.30 down to 0.20 or something like that. • Hand picking of the shredded product for electric motors and free copper can also reduce the copper by around 0.10 if the scrap is not being shredded to the high density mentioned above.

32. There are attempts to separate the copper motors and less magnetically permeable material by means of ballistic separations. This requires a belt with the shredded scrap to be transported at high speed to a magnetic head pulley with lower gauss strength. This allows many of the copper motor windings and free copper wire to project beyond the head pulley while the more ferrous scrap is held by the head pulley magnet can drops onto a different conveyor. The ballastically separated fraction is then hand picked for removal of the copper. • We have actually designed built and operated a system that uses a large trommel when running a campaign for production of low copper residual shredded scrap. In this system, the trommel is located at one side of the stacking conveyor so that when lower residual material is desired the stacking conveyor discharges the entire product stream into the trommel. • The material that passes through the trommel tends to have a higher concentration of sheet steel while engine blocks, powder metallurgy products and the like fall through the trommel screen.

33. Using this system, we consistently produced shredded steel scrap with copper residue in the melt at the steel mill ranging from 0.12 to 0.15 and even guaranteed it to the steel mill. The other product of the trommel was a high copper residual steel scrap that we were marketing to consumers who were making Core Ten steel products.

34. It is known that the intrinsic copper included in American scrap tends to go up a little with the passage of time. We believe that in America at the moment, that we have something like 0.10 contained so that makes it more and more difficult to obtain shredded scrap products with not more than 0.15 points of copper. • This indicates that for the future, there will need to be some amount of DRI blended into the melt mixtures for steel mills that are going to make deep drawing steel plate. • Shredding plant operators will continue the effort to keep adding value to shredded steel scrap and we expect that the total shredded scrap utilized in the world will continue to increase as a percentage of all scrap being processed.

35. As I have spent almost all of my life producing shredded scrap, I like to end presentation with this photo. Shredded scrap moving into a stockpile is a beautiful sight to me. I hope that it will become beautiful to you also.

36. Thank you for allowing this presentation. It is an honor to have been invited and I appreciate the opportunity of sharing this information. • If you are interested in a flash drive with this presentation please email to me and we will send one to you or we will make this available to down load to your computer over the Internet. • We also have available a presentation made in 1993 regarding the production of low copper residual shredded scrap in you would like to have a copy of that. Scott Newell III President Newell Recycling Equipment, LLC ASNIII@NewellEquip.com