June 2019

COPPER CLUB 75TH ANNIVERSARY Diego Hernandez and other leaders on copper’s past, present and future

Metals technologies Top steelmakers 2019 edition PIONEERS AT HEART

AD-Pioneers-at-Heart-EN-vek-280x215_FINA.indd 1 21.01.2019 10:01:13 June Features 20 20 Turkish steel Iron ore Copper Club 75th 67 85 anniversary Tariffs trouble India’s iron ore industry Sonami president Diego As a major scrap-based Divisions over the best Hernandez relates the steel-producing nation ways to exploit India’s roles that have led him with multiple export extensive iron ore to the pinnacle of copper

SONAMI markets, Turkey has been resources continue mining hit by international trade 29 quotas and tariffs Spotlights How the club began Metals Technologies 90 A fascinating account Market spotlight: High- of the Copper Club’s 73 performance metals history, its scholarship New orders and Ever more demanding and awards programs, innovation applications for metals profiles of some of A summary of new orders continue to push greater its leading members, worldwide and examples efforts to increase their and viewpoints on the of technological performance metal’s outlook innovations 95 Top steelmakers 81 End user spotlight: Case study: cold mill Automotive 55 technology Material choices Top steelmakers The new cold mill for electric vehicle 2019 edition complex built for Yildiz production are widening Our annual table of the Demir Çelik in Turkey is as the growing number top global steelmakers a case study in state-of- of new EV models with our regional the-art technology accelerates correspondents’ reviews of market and industry 29 90 trends COPPER CLUB COPPER

67 SHUTTERSTOCK CONSTELLIUM

June 2019 | Metal Market Magazine | 3 June

News and analysis Regulars 9 9 7 Non-ferrous Comment news review Ferrous and non-ferrous A summary of recent key developments in the international non- 97 ferrous industries Innovations New developments SHUTTERSTOCK in steel and metals 12 12 technology, processes Steel news review and products A round-up of important recent developments in the global iron and 98 steel sectors End-user Advances and market developments in 16 applications Base metals and MOTORS GENERAL steel analysis 98 Fastmarkets MB research analysts study the drivers of the base metals, steel and steel raw materials market TOKYO2020.ORG

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Ezz Steel_Driving QualityAdvert_209mmX274mm.indd 1 12/02/2018 15:32 Comment Ferrous and non-ferrous Magazine t would be interesting to know how many of the Published by Fastmarkets. North America steel editor: influential people in the US copper supply chain who 8 Bouverie Street,London EC4Y 8AX. Thorsten Schier UK registration number: 00142215 North America scrap editor: met at the birth of what became today’s Copper Club Tel: +44 20 7827 9977 Sean Barry thought then that the club would still be going strong Fax: +44 20 7928 6892 and +44 20 US reporters: Dalton Barker, 7827 6495 Michael Cowden, Patrick Fitzgerald, 75 years later. E-mail: [email protected] Lisa Gordon, James Lawrence, th Website: www.fastmarkets.com Brad MacAulay, Michael Roh, Orla As the Copper Club now celebrates its 75 O’Sullivan, Nat Rudarakanchana, anniversary, a major section of this June 2019 issue of Metal Market Magazine: Muyao Shen, Mei Ling Toh, Dom Editor: Richard Barrett Yanchunas Metal Market Magazine looks back at the organization’s Associate editor: Seema Chaudhary Global newsdesk editor: Mark Shaw Advertising Sales: purpose and activities. The club has increasingly US newsdesk leader: Sean Mayer Publisher: Mary Connors Senior sub-editors: Cecil Fung, Sara broadened its international outlook, launched Tel: 646 274 6250 Kelly (US), Wei Jun Lau, Renate Foster scholarships to support promising new members of a E-mail: [email protected] Mas (US), Tony Pettengell, Jeff Porter Global senior advertising manager, Sub-editors: Francesca Brindle, group that encompasses all aspects of copper production Europe/Turkey: Arzu Gungor Kyle Docherty Tel: +44 20 7827 5268 CEO: Raju Daswani and trade, and honours leading people who have been E-mail: arzu.gungor@ fastmarkets.com particularly active in the cause of copper. Senior sales manager, Midwest, West Offices: Coast, North America: Jessica Kelliher London: Fastmarkets, 8 Bouverie One such individual, Diego Hernandez, president of “Influential Tel: 312 929 4195 Street, London, EC4Y 8AX, UK. Tel: the Chilean mining association Sonami, is our cover E-mail: Jessica.Kelliher@ +44 20 7827 9977 stakeholders’ fastmarkets.com New York: Fastmarkets, 1120 Avenue interviewee this month. He recalls a career that has Regional sales manager, Middle of the Americas, 6th floor, New York, views on the East/Africa, Asia, UK: Kelly Huynh NY 10036, USA. Tel: +1 (212) 213 6202. spanned important international roles in some of the best Tel: +44 20 7779 8735 Toll free: 1 800 METAL 25, Fax: +1 known mining companies and projects, including outlook for E-mail: Kelly.huynh@ fastmarkets.com (212) 213 6617 Regional sales manager, East Coast, Pittsburgh: 707 Grant Street, Suite 1340, Codelco, Anglo American, Rio Tinto, BHP Billiton copper give a North America: George Reeves Pittsburgh, PA 15210, USA. Tel: 212 224 3938 Tel: +1 (412) 765 2580 and Vale. rounded picture E-mail: George.reeves@ Singapore: Quadrant at Cecil, 3F, fastmarkets.com 19 Cecil Street, Singapore, 049704 Other leading lights and award winners in the sector Shanghai: Fastmarkets, Room 305, of the future for Events and client services marketing 3/F, Azia Center, 1233 Lujiazui Ring recounting distinguished careers within the Copper manager: Adelaida Montilla the red metal” Road, Shanghai 200120. Tel: 212 224 3937 Club anniversary section include Art Miele, Richard Tel: +86 21 5877 0857. Fax: +86 21 E-mail: Adelaida.montilla@ 5877 0856 Adkerson and Apurv Bagri. Their views on the outlook fastmarkets.com São Paulo: Rua Prof. Atílio Innocenti for copper – together with those contributed by many Advertising sales administrator: 165, 7th floor, Rooms 106-107, São Eva Cichon Paulo, SP, 04538, Sao Paulo, Brazil. others in the supply chain and market – give a rounded Tel: +44 (0)20 7827 5263 Tel: +55 11 3197 8750 E-mail: [email protected] Customer services dept: picture of the future for the red metal. Production designer: Paul Rackstraw Tel: +44 (0)20 7779 7390 This issue also includes Fastmarkets’ annual ranking Fastmarkets MB: Subscription enquiries: by output of the world’s largest steel producers – a glance Group editorial director: Alex Harrison Tel: UK: +44 (0)20 7779 8260. Global ores, alloys, minor metals USA: (877) 638 2856/(412) 765 3581 at which list highlights the still growing ascendancy of and industrial minerals editor: Email: [email protected] Asian steelmakers. Regional reports from Fastmarkets’ Fleur Ritzema Fastmarkets is a part of Euromoney Europe ores, alloys and minor Global Limited: 8 Bouverie Street, global team of steel reporters reveal a checkered pattern, metals editor: Charlotte Radford London EC4Y 8AX. albeit with a continuous thread of the positive and Global base metals editor: Directors: Leslie Van de Walle Perrine Faye (chairman), Andrew Rashbass (ceo), negative impacts of the international trade protection Europe base metals editor: Wendy Pallot, Colin Day, Tristan Archie Hunter Hillgarth, Imogen Joss, Tim Collier, Kevin Beatty, Jan Babiak, Lorna Tilbian measures deployed by many countries over the past year. Global steel editor: Andrew Wells EMEA, CIS, Turkey steel editor: Ross Yeo We include a separate feature section focused on the Copyright notice: © 2019 Euromoney Special correspondents: Global Limited trading as Fastmarkets Turkish steel industry, which as a major scrap-based steel Andrea Hotter, Janie Davies All rights reserved. No part of this producing nation, in addition to integrated works, has UK and Europe correspondents publication (text, data or graphic) and reporters: Carrie Bone, may be reproduced, stored in a data been affected by both global and domestic developments Hassan Butt, Cristina Belda, Serife retrieval system, or transmitted, over the past 12 months. Durmus, Amy Hinton, Julian Luk, in any form whatsoever or by any Ewa Manthey, Alice Mason, Vlada means (electronic, mechanical, Our metals technologies section encompasses a list of Novokreshchenova, Viral Shah, photocopying, recording or Marina Shulga, Jon Stibbs, Maria otherwise) without obtaining new plant orders placed in recent months. It shines a Tanatar, Cem Turken, Justin Yang Fastmarkets’ prior written consent. spotlight on some of the latest technologies deployed Latin America reporters: Felipe Unauthorised and/ or unlicensed Peroni, Renato Rostás copying of any part of this publication internationally and a pointer to where the most capital Asia base metals editor: Ellie Wang is in violation of copyright law. Asia ores, alloys and minor metals Violators may be subject to investment is being made – for steel production in editor: Susan Zou legal proceedings and liable for particular. Despite the often-reported cooling in China’s Asia steel editor: Paul Lim substantial monetary damages for Asia steelmaking raw materials each infringement as well as costs rate of growth, projects there are still plentiful. editor: Deepali Sharma and legal fees. Brief extracts may be Meanwhile, the resurgent US steel sector is ploughing Senior correspondents (Asia): used for the purposes of publishing Fiona Lam, Karen Ng commentary or review only provided some of its earnings back into boosting both the Analysts (Asia): Huaqing Fu, Hui Li, that the source is acknowledged. Violet Li, Amy Lv, Anna Xu, July Zhang, ISSN 0002-9998. Printed in the UK and US. In the UK by Buxton Press Ltd, capabilities and capacities of an industry for which Sophie Zhao, Jessica Zong, Miranda Song Buxton, Derbyshire SK17 6AE. In the Prices manager: Mary Higgins President Trump’s trade measures delivered a US by Sheridan NH, 69 Lyme Road, Hanover, NH 03755. bumper year for many mills. Fastmarkets AMM North America non-ferrous editor: Find us online at www.metalbulletin.com and www.amm.com Chris Kavanagh

June 2019 | Metal Market Magazine | 7

News review: non-ferrous

5G phones not likely to hike cobalt demand Some mobile phone producers have started to develop devices that support the fifth generation (5G) network, but long-term support for cobalt demand from 5G phones will be limited, Fastmarkets heard on the sidelines of a cobalt conference in Hong Kong this week. There was likely to be an instant boost for cobalt demand, however, when many consumers replaced their 4G mobile phones with those enabled for 5G, market sources told Fastmarkets at the Cobalt Institute Conference in Hong

Kong, May 15-16. SHUTTERSTOCK But this support for cobalt 5G smart mobile telephone radio network antenna base station on telecommunication masts demand was likely to be short- lived because the total Fastmarkets AMM via email that Investment Holding’s Vanchem appointed for each global metal to consumption of cobalt for mobile the facility will consume 70 million plant, the ferro-vanadium lead both the refined and raw phone manufacture was not lbs of aluminium with the new press. business of its subsidiary South materials businesses. expected to rise significantly, African Japan Vanadium (SAJV), they added. Jiangxi Copper builds and all the shares in subsidiary Zinc TCs to remain high scrap facility in Malaysia Ivanti Resources. through 2019: Nexa CEO Rusal seeks market The Vanchem plant is a primary Jiangxi Copper has become the vanadium producing facility. It Zinc spot treatment charges (TCs) share after 21% earns fall first Chinese company to receive produces vanadium oxides, could remain at their current high Russian aluminium producer the green light to set up a ferro-vanadium and vanadium levels through the rest of 2019 Rusal said it will focus on restoring large-scale copper scrap chemicals. because additional Chinese its market position after its processing facility in Malaysia smelting capacity will only come first-quarter revenues plunged by after China’s clamp down on Glencore’s cobalt online next year, Nexa Resources’ 20.9% year on year in a period copper scrap imports led to mass chief executive officer Tito “challenged by the past year’s scrap diversion to Southeast Asia, production up 56% in Q1 Martins told investors on May 2. events.” two company officials directly Glencore produced 10,900 tonnes But the price on the London Rusal reported revenue in the involved in the matter told of cobalt in the first quarter of Metal Exchange could rise in the first quarter of 2019 of $2.17 Fastmarkets. 2019, up 56% from 7,000 tonnes second half of the year amid a billion, a fall of 20.9% year on year The major project, including produced during the same period global deficit of the metal, he from $2.744 billion. The company the process of scrap dismantling, a year ago. added. The company has forecast said the fall in revenue was due to was approved despite opposition The increase was largely due to that consumption will exceed the decrease in the London Metal from the Malaysian market the ramp-up at the Katanga mine production during 2019. Exchange aluminium price, which arguing that the country should in the Democratic Republic of fell by 13.9% to $1,859 per tonne avoid being a “dumping ground” Congo. A total of 3,500 tonnes of Falling prices hit in the first three months of 2019, for scrap unwanted by China. cobalt in hydroxide was produced compared with $2,159 per tonne The facility will be able to at the mine in the first quarter Southern Copper in 2018. process up to 150,000 tonnes per compared with 500 tonnes in the earnings year of copper scrap and should be January to March quarter of 2018. Southern Copper Corp (SCC) saw Alexandria to complete in one year’s time, the its earnings drop in the first grow Minn extrusion first company source said. Trafigura reshuffles its quarter of 2019, with falling global non-ferrous metals team metals prices offsetting an increase capacity by 30% Bushveld to acquire in shipments as the company Alexandria Industries is Trafigura has consolidated its ramped up output at its copper expanding its Alexandria, Duferco vanadium assets leadership team in the non-ferrous concentrator at the Toquepala Minnesota, aluminium extrusion Vanadium producer Bushveld refined and concentrates metal mine in Peru. facility, with extrusion capacity Minerals has agreed to buy division headed by Amin Zahir in a SCC posted net revenues expected to increase by 30% once multiple South African management reshuffle, of $1.75 billion in the first a newly purchased press is installed. production assets for $68 million, Fastmarkets learned on May 15. quarter of 2019, down by 4.8% The company declined to it said on May 1. In the reshuffle, which was from $1.84 billion in the same disclose the facility’s current or The South Africa-based miner announced in the first week of period of 2018, hit by lower global projected annual capacity, but told will acquire Duferco Vanadium May, new heads have been base metals prices.

June 2019 | Metal Market Magazine | 9 Deal ends strike at Minsur tin mine in Peru Peruvian tin producer Minsur resumed normal operations at its San Rafael mine in the southern province of Melgar on May 1 following the end of a workers’ strike that was announced on April 30. “An agreement was made with our workers’ trade union at San Rafael to finish the strike,” Minsur said in a filing with the Peruvian stock exchange. “Work at the unit was immediately resumed.” The union had demanded a bonus for employees, since the workers did not agree with the share of profits distributed by the HYDRO NORSK mining company, Minsur stated Norsk Hydro aims to create a sustainable footprint for its low-carbon aluminium products on April 30. through the life cycle of its Industries − to supply aluminium viable competition? We think it’s Mineral Resources’ Mount low-carbon aluminium products sheet for North American some time.” Marion lithium output dips and solutions, the company’s new manufacturing, due to the president and chief executive venture’s focus on a low-carbon AMG Ebitda boosted Australian lithium spodumene officer, Hilde Merete Aasheim, footprint and using “green” concentrate producer Mineral said this week. inputs, Braidy Industries’ by strong V, Cr prices Resources has announced lower Aasheim took up her new top executive told Fastmarkets AMG Advanced Metallurgical first-quarter spodumene position at the Norwegian AMM. Group recorded a modest increase production at its Mount Marion aluminium producer on May 8, Once the greenfield aluminium in earnings before interest, tax, mine in Western Australia. replacing Svein Richard rolling mill begins production, depreciation and amortization It produced 106,683 tonnes of Brandtzæg whose departure was starting from 2021, it will supply (Ebitda) at its Critical Materials lithium spodumene concentrate, announced in March. the automaker’s South Carolina division for the first quarter of at the Mount Marion operation in plant with 5000- and 6000-series 2019, helped by strong the south-central region of the Novelis sales jump aluminium sheet, Braidy performances in vanadium, state, in the January-March Industries chief executive officer chrome and antimony. quarter, down by 7.23% from the 8% on higher Al prices Craig Bouchard said. The division generated Ebitda 115,000 tonnes produced in the Downstream aluminium product of $31.2 million, up 1% compared previous quarter, Mineral maker Novelis announced an 8% GrafTech unfazed by with the first quarter of 2018, the Resources said. jump in sales, which it attributed Amsterdam-listed group said on to higher aluminium prices in its Chinese electrode May 1. Hernic Ferrochrome 2019 earnings report on May 8. competition The Atlanta-based company Graf Tech International is unfazed Silicon refineries in expected to scale down reported net sales of $12.3 billion by increased competition from its smelting ops in the fiscal year ended March 31, China’s ultra-high-powered southern China delay Hernic Ferrochrome expects to 2019. graphite electrode market thanks restarts on rising costs scale down its smelting operations “The increase was driven by a to growing steel capacity in the A decision by some silicon metal between June and August amid higher average aluminium price,” United States, according to the producers in southern China not challenging market conditions, the the company said in the report. graphite electrode manufacturer’s to resume operations immediately company announced last week. A 3% increase in shipments of top executive. after the start of the region’s rainy The South African ferro-chrome flat-rolled products to 3,274,000 “How much of it actually season could signal the producer went into business tonnes also helped boost the reports to the market, and how development of a wider trend rescue in September 2017. Rival sales figure. long will it take for them to get to a across the region, Fastmarkets Samancor Chrome was expected place where they do actually build MB understands. to buy it after being named the Braidy-Rusal JV scores these [graphite electrode facilities] Increasing costs arising from preferred bidder in 2017. and get them up and running?” China’s anti-pollution drive and a BMW Al sheet contract president and chief executive persistently weak market has Hydro CEO eyes Al business BMW Group has chosen Braidy officer David J. Rintoul said on caused some silicon metal Atlas − the joint-venture project May 1 during the Ohio-based producers in the southern Chinese CO2 footprint between Russian aluminium company’s earnings conference provinces of Yunnan and Sichuan Norsk Hydro will aim to create a producer UC Rusal and US call. “How long will it be before to delay the restart of their more sustainable footprint holding company Braidy they can practically be considered refining operations.

10 | Metal Market Magazine | June 2019 SierraTSI2019AMMAdHP_1 1/18/19 10:47 AM Page 1

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June 2019 | Metal Market Magazine | 11 News review: steel

GM expects especially hurt by lower prices 232 headwinds during the period. The company did increase its The Section 232 tariffs on capital expenditures to $5 aluminium and steel imports million in the quarter, up from into the United States − $1 million in the first quarter combined with higher of 2018. commodities prices − will cost General Motors $1 billion this Strong prices boost 2018 year, company executives said during a conference call to earnings, Ezz Steel says discuss the automaker’s Egypt’s use of selective first-quarter earnings. anti-dumping duties helped the For the full-year 2019, GM country’s biggest steelmaker, expects “headwinds from Ezz Steel, to report a 23% commodities and tariffs to the MOTORS GENERAL increase in earnings in 2018, the tune of about $1 billion,” chief Headwinds from higher commodities prices and Section 232 company said last week. financial officer Dhivya tariffs hit General Motors first quarter results Ezz Steel enjoyed strong Suryadevara told analysts demand for long and flat steel during the conference call, “The company in liquidation which produces such materials products in both the domestic echoing sentiments the is continuing to trade and as hot-rolled coil, were and export markets, it said. This automaker had expressed supply its customers while I €598.8 million ($672 million), enabled it to show consolidated last summer. After the 232 consider options for the down from €609.4 million the earnings before interest, taxes, tariffs were implemented last business. Staff have been paid year before. depreciation and amortization year, GM noted in its second- and will continue to be The €125.9 million ($141.29 (Ebitda) of E£5.44 billion quarter 2018 results that its employed,” a statement from million) of pre-tax earnings for ($317.53 million) for 2018, largest exposure to volatility the official receiver said. the first quarter of 2019 compared with E£4.42 billion in the metals market came “The [UK high] court also compared with €95.9 million a for 2017. from steel, followed by appointed special managers to year earlier. It was also the best But the company’s net aluminium. assist me with my work and first quarter for the company earnings, after tax and minority they are engaging with staff and since 2008 and confirmed interests, showed a loss of Scrap challenges drive their representatives to keep preliminary expectations E£1.64 billion in 2018. This them informed, as well as announced on April 29. compared with a loss of E£1.58 ISA to post Q1 loss contacting British Steel’s In spite of the increased billion in 2017. Industrial Services of America customers,” the statement earnings, the steelmaker Inc swung to a loss in the first continued. warned of emerging economic Weak Turkish lira hurts quarter, citing the challenging The UK high court has headwinds and an uncertain business environment. appointed Hunter Kelly, Sam political environment. But it long steel mart “Recent and ongoing market Woodward and Alan Hudson did affirm its expectation for The long steel markets in Turkey conditions had a dramatic of global professional services pre-tax profit in the 2019 have been more seriously affected impact on first-quarter 2019 firm EY to act as special financial year of €125-175 by the consequences of the results. Although we are managers to assist the official million. recent country-wide mayoral disappointed in first-quarter receiver with his duties as elections than the flat steel 2019 results, we continue to liquidator. PSC Metals swings markets because of the increased work to mitigate the impact of to quarterly loss weakness of the country’s lira. these market conditions,” chief Salzgitter excels in Q1, The decline in the exchange- executive officer, president and PSC Metals LLC swung to a rate value of the Turkish lira chief financial officer Todd warns of headwinds loss in the first quarter of 2019 hurts the long steel market Phillips said in a statement on German steelmaker Salzgitter as fewer shipments and lower because that is the currency used the company’s earnings results showed a year-on-year increase average selling prices for trading in such commodities. on May 14. of 31% in pre-tax earnings for negatively impacted its The flat steel market, the first quarter of 2019, revenues. meanwhile, conducts its trades British Steel enters attributed to the “very satisfactory” The Mayfield Heights, in US dollars. results from its steel strip Ohio-based metal recycler The mayoral elections were compulsory liquidation business and other units, the posted a $3-million loss on $93 held on March 31, with some Troubled UK long steel company said on May 15. million in revenues in the three unexpected results. producer British Steel has been Salzgitter’s total external months ended March 31, in placed into compulsory sales for the first quarter were contrast to a $4 million profit China slaps 25% tariff liquidation following an order €2.3 million ($2.6 million), on $118 million in income over from the UK high court, the UK unchanged from the the same period in 2018. on American steel official receiver, part of the corresponding period in 2018. The company pointed out China will impose tariffs of up to UK’s Insolvency Service, said Total sales in the first quarter that non-ferrous residue 25% on carbon and stainless on May 22. from the strip mill business, material such as zorba was steel imports from the United

12 | Metal Market Magazine | June 2019 States beginning in June amid $17.5 billion, Vale said. Roughly escalating trade tensions 60% of the miner’s production is between the two countries. currently dry, using only natural These form part of $60 billion moisture, it added. worth of US products that China The company expects to imports. invest $390 million solely in the The bulk of steel products, Brazilian southeastern state of listed by China’s Ministry of Minas Gerais for the Finance, face the heftiest tariffs implementation of dry stacking, of 20-25% from June 1. These the miner said. include billet, hot-rolled coil, The Brazilian diversified cold-rolled coil, hot-dipped miner reported a net loss of galvanized flat steel, color- SHUTTERSTOCK $1.64 billion in the first quarter coated steel, hot-rolled bar and The Indian government’s big investment into housing schemes of 2019 due to provisions made rod, and structural steel, as well will fuel steel demand growth after a disaster at a tailings as various types of stainless dam at Brumadinho, in the steel products. “India’s steel demand is The report showed sales country’s southeastern state of Other steel products will incur expected to increase by 200 volumes of 2.99 million tonnes Minas Gerais. a 10% tariff. million tonnes in 20 years, with for January-March, compared Currently, China has a 5-10% domestic production capacity with 3.87 million tonnes in the ThyssenKrupp to cut tariff on US steel products. likely to rise to match it,” Wood first quarter of 2018. Crude steel Mackenzie bulks researcher output also fell to 3.34 million 2,000 EU steel jobs Former ArcelorMittal Ming He said. tonnes, against 4.17 million German industrial The Indian government has tonnes in the same comparison. conglomerate ThyssenKrupp is plant has new owner made huge investments into Gerdau completed the sales of planning to cut 6,000 jobs over Three years after it was shuttered housing schemes and its Chilean and Indian the next three years, including and put into liquidation, the infrastructural projects, which businesses, as well as rebar and 2,000 jobs in its steel business, former ArcelorMittal steel mill could lead to sustained growth in wire rod units in the US, last chief executive officer Guido in Point Lisas, Trinidad and the steel markets in coming year. Although the move Kerkhoff said in a conference call Tobago, has a new owner. years, according to National reduced overall revenue, the on May 10. Aeternus Steel Holdings Ltd, Mineral Development remaining divisions reported ThyssenKrupp remains a joint venture between local Corporation chairman higher margins for the company. open to consolidation company Integritus Group and N. Baijendra Kumar. opportunities for its European Dubai investors Cassia Group Vale to invest $2.5bln in steel business, which will be was announced May 1 as the Gerdau Q1 sales fall on reintegrated into the parent winner of a bid round initiated iron ore dry processing company, following news of the by the liquidator, Trinidadian 2018 divestments Vale plans to invest around $2.5 European Commission’s attorney Christopher Kelshall. Brazilian steelmaker Gerdau billion in iron ore dry processing expected non-approval of the The bid round, the second for saw its sales volumes go down by during the next five years in a proposed European flat steel the plant, began in January and 22.9% year on year during the move that is estimated to switch joint venture with Indian ended in March. first quarter of 2019 after 70% of output to this method, steelmaker Tata Steel. The company, which appears divesting operations in Chile, the Brazilian mining company The company also plans to to be newly incorporated, was India and the United States said on May 13. hold an initial public offering for created “with the intention to throughout 2018, the company Over the past 10 years, capital its profitable elevator business provide world-class, high-end said in an earnings report expenditures in Brazil aimed at and is open to consolidation quality steel products to the published on May 8. reaching this goal have totaled opportunities for its material domestic market, the wider services business, which Caribbean and the international includes Italian flat stainless steel community,” according to its mill Acciai Speciali Terni. website. It will now have access to one of the biggest direct-reduced Liberty promotes GM, iron plants in the world. eyes US market share India is rising star of In a move to better enable its expansion within the United Asian steel market States, Liberty Steel USA has India is likely to be the rising star appointed Revansidha “Rohit” of the Asian steel markets longer Gulve general manager of term due to the expected growth recently acquired long products in its steel demand, delegates at mill Liberty Steel Peoria in the Singapore Iron Ore Forum THYSSENKRUPP Illinois. − the anchor event of Iron Ore ThyssenKrupp remains open to consolidation opportunities for Gulve had been general Week − said on May 9. its European steel business amid rationalization news manager of the smaller

June 2019 | Metal Market Magazine | 13 News review: steel

Liberty Steel Georgetown. a non-executive director of Itau Liberty Steel USA, a subsidiary BBA International Ltd, deputy of parent company GFG chairman of The Financial Alliance, has credited Gulve Reporting Council and a member with leading the restart of the of the board of Standard Chartered. long-idled long products mill in In 2016, she received an OBE South Carolina. for services to financial services “We have made substantial and diversity. progress since we entered the US market last year, and Rohit’s China encourages mills skills and commitment have played a vital part in that,” to set up scrap centers Liberty Steel USA chief China’s National Development executive Michael Setterdahl & Reform Commission is said. “We’re confident he will encouraging steelmakers in the now bring continued success country to set up their own scrap and growth to Peoria and give LME recycling and processing centers added momentum to Liberty’s Gay Huey Evans will replace Sir Brian Bender as chairperson of the in its latest guidelines to the steel drive forward in the American London Metal Exchange when he retires industry. steel sector.” “Steel mills are encouraged to investment in the US steel The cold-rolling and coating build their own large-scale Burns Harbor coke industry in the last decade, the facilities at Irvin will continue to ferrous scrap collection and company said. operate, Richard Fruehauf, vice processing centers and increase battery repairs Zekelman has tapped SMS as president of strategic planning the rate at which ferrous scrap is under way supplier for the mill, Kusakabe at U.S. Steel, told Fastmarkets utilized,” the commission, Roof repairs are under way for for the milling cut-off and Mair AMM. China’s economic planning ArcelorMittal USA’s No2 coke for the material handling and agency, said in a policy battery at its Burns Harbor packaging line, according to the Revised duties new document posted late last week. facility, a company spokesperson announcement. Steel mills should consider the confirmed to Fastmarkets AMM hurdle for Mexico demand and supply via email on May 7. Irvin hot-strip mill to tube ops fundamentals of the scrap The $19.25-million project, The United States Commerce market, as well as other which will not add to the close after USS project Department ordered higher transportation and logistical company’s coke or steelmaking U.S. Steel (USS) plans to close anti-dumping duties on most factors, as “strict” precursors to capacity, is scheduled to be the hot-strip mill at its Irvin Plant imports of light-walled replace some of their blast finished in 2022. near Pittsburgh once a $1.2 rectangular tubing from Mexico, furnace capacity with electric- The facility’s No2 battery is billion continuous casting and erecting an additional barrier to arc furnace technology, it said. designed to produce 950,000 rolling facility is constructed the Mexican producers who still tons of coke per year for nearby, company executives said face Section 232 tariffs. Global long steel outlook ArcelorMittal’s Burns Harbor on May 7. Three of four Mexican steelmaking operations, The state-of-the-art “endless” providers of light-walled worsening: Irepas according to the company casting and rolling operation will rectangular pipe and tube had The global long steel market was spokesperson. be located at U.S. Steel’s Edgar their dumping margins mostly unstable despite a Thomson Plant in Braddock, increased in Commerce’s balance between supply and Zekelman to build Pennsylvania, where the administrative review, demand, the International company’s blast furnace and slab according to the final results last Rebar Producers and Exporters $150mln ERW tube mill casting operations are situated. month. The new range is Association (Irepas) said in its Zekelman Industries will build “Irvin will continue to run 8.32-17.65% versus most recent short-range outlook the “world’s largest continuous production. And then we’ll have 4.48-16.23% preliminary results document for the long steel sector. ERW [electric-resistance- a transition to the Edgar in August 2018. This was a change of welded] tube mill” to increase Thomson facility,” U.S. Steel sentiment from the positive the domestic availability of president and chief executive Huey Evans to be first outlook Irepas offered in March. hollow structural sections and officer David Burritt said at the Although the balance of target the non-residential annual Association for Iron and female LME chairperson supply and demand has been construction market, the Steel Technology conference in Gay Huey Evans will be the first maintained in the global long company announced on May 7. Pittsburgh. He noted that the female chairperson of the steel market, business remains The location and capacity of Irvin Plant hot-strip mill, which London Metal Exchange, difficult to transact on a global the mill were not disclosed. was built in 1938, is dated. replacing Sir Brian Bender when scale, Irepas said in its outlook The $150-million facility is The first coil from the new line he retires at end of the year, report on May 3, leading to the scheduled for start-up in at Edgar Thomson is expected to Fastmarkets understands. forecast of instability. But September 2021, according to be rolled in 2022. Once that line Huey Evans has spent over 30 shorter-distance regional the Chicago-based tubing mill. It is rolling, the hot-strip mill at years working within the business was mostly good, it represents the largest private Irvin will not be needed. financial services industry. She is added.

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June 2019 | Metal Market Magazine | 15 Market analysis Aluminium Lead Prices poised to rebound Low stocks, but little else to be bullish about yet The re-escalation of tensions in LME cash price, $/t LME lead prices have LME cash price, $/t the US-China trade dispute 2,500 rebounded well after slipping 2,750 over the past month, coupled to a three-year low of $1,773 2,500 with soft Chinese economic 2,000 per tonne on May 13, which is a 2,250 data, has sapped global risk sign of good dip-buying 2,000 appetite and pressured base 1,500 appetite. Lead has been one of 1,750 metal prices lower. After last LME/Fastmarkets the biggest losers from global LME/Fastmarkets year’s strong sell-off, LME 1,000 trade tensions as the 1,500 Oct 17 Oct 17 Oct 16 Oct 16 Oct 18 Oct 18

aluminium’s price action so far Feb 17 Feb 17 Jun 17 automotive industry has been a Jun 17 Feb 16 Feb 16 Feb 19 Feb 19 Jun 16 Jun 16 Feb 18 Feb 18 Jun 18 Jun 18 Jun 19f in 2019 is looking more like hard hit sector. Some good Jun 19f base-building and market after it reached an news was that US President and provide a boost. That could consolidation. It has traded agreement to remove Section Donald Trump delayed for six lead to a pick-up in interest and within a range of $1,785-1,950 232 tariffs from Canada and months his decision on whether perhaps some restocking along per tonne and has set a triple- Mexico. Prior to the to impose tariffs against supply chains, which would bottom. In holding it down, implementation of 232 tariffs, imported vehicles and vehicle have a bullish knock-on effect speculative funds have built the US Midwest premium was parts from Japan and Europe. given still low visible their bearish exposure to a around $175 per tonne, but it But China’s auto industry inventories of refined lead. record high level. That leaves skyrocketed to almost $500 per remains in the doldrums. Since Overall, after suffering more this market at risk of short- tonne in April 2018 and has it has been contracting for ten than most in the trade war covering rallies if bullish triggers continued to trade above $400 months, and US-China fall-out, lead may be a big emerge. As for premiums, we per tonne. It should now retreat tensions have only escalated, gainer when a deal gets done expect some action in the US from this elevated level. Beijing may step in to intervene and sentiment recovers. Copper Nickel Bearish risks dominate short-term view More fundamental positives than negatives

We have a bearish short-term LME cash price, $/t For nickel, although a weak LME cash price, $/t view on copper prices for the 8,000 stainless steel market is 16,000 coming month or so due to the 7,000 compounding broader macro/ 14,000 absence of tightening in the 6,000 geopolitical risk-off sentiment, 12,000 fundamental picture (evident in we believe there are still more 10,000 weak premiums) and the 5,000 fundamental positives than 4,000 8,000 deterioration in the forward LME/Fastmarkets negatives for the nickel market. LME/Fastmarkets fundamental picture (due to 3,000 Some of the positives include 6,000 Oct 17 Oct 16 Oct 17 Oct 18 Feb 17 Jun 17 Oct 16 Oct 18 Feb 16 Feb 19 Jun 16 Feb 17 Jun 17 Feb 18 Jun 18 Feb 16 Feb 19 Jun 16 Feb 18 Jun 18

US-China trade tensions and still-strong growth in Chinese Jun 19f Jun 19f perceptions of softer economic EV sales of 28% year on year in growth in China). This could 11.8% in the year to date amid a April, despite a reduction in Lundin -18.1%, among others), translate into speculative global automotive recession. government subsidies; the with cumulative production selling until a recovery in Q2. However, we expect a resumption of environmental among these seven down 11,600 Regarding Chinese copper re-acceleration in Chinese inspections in China that may tonnes versus Q1 2018. And Vale demand indicators, although copper consumption in H2 disrupt NPI production in the has lowered its 2019 guidance by the home appliance sector 2019 stemming from stronger short term; and exchange stocks 28,000 tonnes relative to our (15% of domestic copper demand from the power sector remaining on a downtrend. In previous reference point. These demand) has been solid, (52% of Chinese domestic addition, the Q1 reporting positive fundamentals are expanding by 12.5% year on demand). We estimate Chinese season has revealed generally helping to support the downside year in January-April, the real refined copper demand lower year-on-year production for nickel prices during this soft transport sector (9% of Chinese growth at 3% and 4% in Q3 and by many nickel miners patch by attracting bargain copper demand) continued to Q4, respectively. This should (Nornickel -0.4%, Glencore hunting, and laying the foundation deteriorate. Automobile underpin a strong rebound in -10%, Vale -6.1%, BHP -9%, for a recovery in prices when production has contracted by copper prices in H2. South32 -12.1%, Eramet -5.4%, risk-appetite recovers.

In this regular section, Fastmarkets MB’s research team summarize their in-depth reports to highlight key factors driving the markets and their short-term price forecasts. The weekly service, Base Metals Market Tracker, provides independent analysis and forecasts for base metal markets and prices.

16 | Metal Market Magazine | June 2019 World leading market analysis www.fastmarkets.com

Tin Steel Resilient price may not last Production cuts beckon, but more in the LME tin has proven more LME cash price, $/t “west” than in China resilient than other base metals 25,000 with the re-escalation in the Increasingly positive sentiment Fastmarkets steel indices US-China trade spat. We 20,000 and the strong price rises we 120 Jan 2012 = 100 continue to be mildly bearish on recorded in March led to a large 110 tin prices in the short term due to 15,000 revival in margins at China’s continuing weak physical LME/Fastmarkets steel producers. From a profit 100 demand, expectations for a 10,000 margin of just 2% in the 90 Oct 17 Oct 16 Oct 18

recovery in Indonesian tin Feb 17 January-February period we Jun 17 Feb 16 Feb 19 Jun 16 Feb 18 Jun 18 Jun 19f exports, and looser refined tin detailed one month ago, steel 80 market conditions proxied by global demand). According to producers moved up to 3% for rising exchange inventories since the Semiconductor Industry the first quarter. This, however, 70 the start of Q2. The negative Association (SIA), is just half of China’s industrial 60 macro backdrop could also semiconductor sales in Q1 average. As the chart shows, impact tin prices to some extent. tumbled 29% quarter on quarter from a profitability perspective, 50 Jul 14 Oct 15 Jan 17 Jan 12 Apr 13 Jun 17 Sep 13 Dec 14 Nov 17 Apr 18 Feb 14 Feb 19 Nov 12 Sep 18 Aug 16 Mar 16 May 15 We expect a rebound in tin prices in the US and dropped 15% in the steel industry was the worst Global flat products index from late June, however, as the China. In China, semiconductor performing industry in China Global long products index SHFE/LME tin ratio seems to production dropped 2.1% year during Q1, worse even than the Steel price index Fastmarkets MB signal. Solder accounts for about on year in April, marking an 8th automotive industry; profits Year-on-year changes in Chinese half of global refined tin demand, straight month of year-on-year fell more than 40% year on industrial profits in Q1 2019, % especially in the US (8% of global decline, and has contracted by year. At the top end of the scale 200 demand) and China (50% of 6.7% in the year to date. – no surprises here – were the profits of China’s iron ore 150

miners who benefited hugely 100 Zinc from a combination of rising demand – otherwise known as 50 excessive BFI production in Tightness still prevails 0 China – and supply constraints Despite macroeconomic LME cash price, $/t among their lower-cost rivals in -50 headwinds and surging 4,000 Brazil and Australia. Together concentrate production, falling 3,500 these factors pushed and pulled Total Industry Other Industry SHFE zinc stocks remain a 3,000 the MBIOI62 to a Q1 average Mining of Other Ores barometer for the underlying 2,500 of $82.41 per tonne, up 11% Repair of Fabricated Metal Mining and Washing of Coal Mining of Ferrous Metal Ores Waste Recycling and Recovery Manufacture of Motor Vehicles fundamentals in China, backing 2,000 year on year. Manufacture of Other Transport Manufacture of Fabricated Metal Mining of Non-Ferrous Metal Ores Manufacture and Processing of Steel up the notion that smelters have 1,500 LME/Fastmarkets China’s Manufacturing PMI Manufacture and Processing of Metal Mining And Processing of Nonmetal Ores Manufacture of Electrical Machinery and… Manufacture of Special-Purpose Machinery

yet to raise their utilization rates. 1,000 remained positive in April, just, Manufacture of General-Purpose Machinery Source: NBS, Fastmarkets MB Oct 17 Oct 16 Oct 18 Feb 17 Jun 17 Feb 16 Feb 19 Jun 16 Feb 18 Even though around 500,000 Jun 18 though the relevant indicators Jun 19f tonnes per year of updated for the steel industry were smelting capacity is due to enter in 13 years suggests the ex-China again comparatively strong: first four months to 11.1%. In a production this year, China’s market remains tight. But price Manufacturing production hit further sign that the steel environmental watchdog will sentiment is being driven by a score of 52.1; New Orders industry has overcome the conduct further rounds of macro factors – namely 51.4; and the so-called environmental constraints that inspections, maintaining pressure US-China trade tensions – and Purchase Quantity Index, Chinese authorities imposed, on smelters. It appears unlikely the risks remain to the downside which refers to manufacturers’ Hebei province, the state at the we will see any major step up in or until the fundamentals can key raw material hit 51.1. epicenter of “blue sky” targets, utilization rates until H2 and our reassert themselves. When they These readings were all recorded a 16.5% rise in steel forecast for annual output growth do, the key will be whether the comfortably above the headline production and a 17.8% rise in of 1.9% may need downgrading. concentrate surplus is filtering number. In the circumstances crude steel effectively Elsewhere, the lack of deliveries into the refined market or saleable (finished) steel increasing their share of the into the LME warehouse system whether the smelting bottleneck production continued to surge national total to 24%, double despite the biggest backwardation continues to hold it back. in April rising by 11.5% among their nearest rival Jiangsu. the CISA-member mills, While the characterization Analysis by Andy Cole, Fastmarkets MB pushing the growth rate for the of a booming China has

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clearly returned, the associated benefits of high Steel raw materials prices and profits everywhere Global scrap prices hinge on Turkey’s return to health else, is yet to materialize. Nowhere is this the case more At a roundtable discussion this Fastmarkets MB steelmaking raw scrap. US ferrous scrap clearly demonstrated than in January at the Material materials indices exports rose 15.7% year on 140 Jan 2012 = 100 the US where mill prices for Recycling Association of India Fastmarkets year in 2018 to 17.33 million the HRC benchmark fell below (MRAI) in Kochi, Southern 100 tonnes, according to US $700 per metric tonne in May India, we presented to 60 Census Bureau data, but the for the first time since before delegates the view held by the 20 share occupied by Turkey – its Jul 14 Oct 15 Jan 17 Jan 12 Apr 13 Jun 17 Sep 13 Jun 12 Dec 14 Nov 17 Apr 18 Feb 14 Feb 19 Nov 12 Sep 18

section 232 (December 2017). Aug 16 Fastmarkets MB research Mar 16 single largest buyer – fell. May 15 In the southern EU market, team that ferrous scrap prices Asian import HMS No1 cfr Turkey’s export share for prices have fallen to an average this year will be higher than Fines 63.5% cfr main China ports ($/tonne) 2018 was 19.8%, down of €450 per tonne ($500) for 2017 but underperform since Australian hard coking spot fob price (metric) strongly from the 24.3% share the first time since November last year. As one might expect, seen in 2017, with volumes to 2016. Back then, US prices Export markets are key factors for this view did not receive US local scrap prices Turkey actually falling 5.5% in were struggling to revive universal approval from a 2018 to 3.43 million tonnes. above $550 per tonne and US room packed with scrap US export Instead, Asian countries mills will be hoping that merchants, but so far our US local HRC price gained share, with exports to Section 232 will continue to theory has been correct. Prices Scrap export volumes South Korea, Vietnam and protect them from any cheap, for Northern Europe-origin Domestic scrap use Taiwan making up an average lossmaking EU or other HMS 1&2 (80:20) scrap of 22.4% of all US exports in 0% 30% 60% 90% foreign steels that would imported to Turkey looked Note: US scrap exports and scrap demand calculated with 2018 compared with 17.1% otherwise force them back to likely to average around $300 one-month lead time in 2017. Source: Fastmarkets AMM, Fastmarkets MB lossmaking levels below $600 per tonne cfr in the first five Despite the tough year so per tonne. At present, the months of 2019. That far, Turkey’s import scrap average south European mill compares with $351 per tonne scrap markets and export market could be partially base price at the port of export last year and $267 per tonne in prices has been negative for healed by the recent halving of to the USA would be no less 2017. Similar price patterns US domestic tags. Although US import tariffs on Turkish than $628 per tonne FOB have also been seen in other local factors such as bloated steel back to 25% from the when including the 25% tax, key ferrous scrap import markets supply contributed to the previous 50%. With the tariff giving the supplier no more such as India and Taiwan. downturn in the US domestic reduction, Turkey’s export than an unpalatable $62 per The key reason for lower scrap market in April and May, rebar prices (including tonne to deliver material into scrap prices this year has been the drop came after two freight) can now undercut the US Midwest. If as we Turkey – the world’s largest consecutive monthly declines local US prices by over $100 suspect, US prices only have scrap importer and leader for in Turkey. Our research shows per tonne, likely raising farther to fall in the short term global scrap prices – has that the monthly change in the Turkey’s rebar sales and as Canadian and Mexican caught a cold. With the weak Philadelphia HMS 1 scrap supporting scrap demand. supplies compete duty free, lira and a shrinking local price has only diverged from But unhealthy downside risks US and not just European mills construction sector reducing the direction of the Turkish persist as EU quotas mean – ArcelorMittal has already margins, Turkey’s long steel HMS 1&2 import price one Turkey will no longer have announced pending cuts – are mills have this year cut back on month per year since 2014. As access to European long steel going to be contemplating production and reduced scrap the chart shows, changes in the markets in the second half of some significant downtime. purchases. Turkey’s crude Chicago domestic shredded 2018, while Oxford Unable to blame China, steel output fell 13.9% year on scrap price since the start of Economics forecasts Turkey’s whose trade to both markets is year in January-March, 2012 have correlated more construction output will fall a fraction of what it was, the according to the World Steel closely with export volumes 1.7% this year. So despite any solutions will have to be found Association. The country (with a one-month lead time) near-term boost from the closer to home. EU mills imported 3.89 million tonnes and export prices than local tariff reduction, we see overall have continued to cut of ferrous scrap in January- hot rolled coil (HRC) prices Turkish import scrap prices production this year, if only by March, the Turkish Steel and local demand with a underperforming last year 2% on average, whereas US Producers Association said, one-month lead time. overall, and thus we maintain mills were going the other way lower than both 2018’s 5.37 The US market’s continued that unpopular view given at up 7% in the first quarter. million tonnes and 2017’s 4.25 exposure to the Turkish MRAI Kochi. million tonnes. import price comes despite the Analysis by Alistair Ramsay, The high correlation US being less dependent on Analysis by Lee Allen, Fastmarkets MB between movements in US Turkey as a buyer of their Fastmarkets MB

In this section, Fastmarkets MB’s research team summarize their in-depth reports to highlight key factors driving the markets and their short-term price forecasts. We provide several regular services dedicated to the ferrous markets, providing independent analysis, price forecasts and supply and demand forecasts. Request your free sample of these services – www.fastmarkets.com

June 2019 | Metal Market Magazine | 19 Profile SONAMI

20 | Metal Market Magazine | June 2019 Diego Hernandez ‘Copper has a great future’

With an international career that has spanned senior positions with some of the biggest companies and mines for non-ferrous metal production, Sonami president Diego Hernandez tells Andrea Hotter about the multiple roles that led him to the pinnacle of copper mining

Diego Hernandez was in his mid-20s or want, so he politely declined. But the Hernandez to speak a foreign language when he learnt a very important lesson man persevered and it became clear that fluently and sent him to the French about negotiating. The young mining he was not going to take no for an answer. school in Santiago, where he learnt to executive, who would go on to become “I said I didn’t have the money just to read and write in French even before the chief executive officer of both stop the farmer from offering me the mastering his native tongue, Spanish. Collahuasi and Codelco – as well as hold piece of land, so he said, ‘ok, I’ll take your Excelling in mathematics, Hernandez senior positions in BHP Billiton, Anglo car.’ That was probably half the price of was in the top five nationally in exams American and Rio Tinto – was working the piece of land, which I didn’t even and ended up at the Engineering School in Minas Gerais state in Brazil. want,” Hernandez says. at the University of Chile, where his older It was his first on-the-ground role in Hernandez ended up buying the land brother was studying chemical mining, and he was general manager of a using his car and some extra personal engineering. When it came to pick an tin and tantalum operation in an area money as payment, learning in the engineering discipline to specialize in surrounded by farmland. Naturally, this process some key takeaways about during his third year, “then I wondered meant lengthy discussions with local negotiating, including that creativity and why I was there!” Hernandez laughs. farmers over land access, which was persistence pays. He eventually settled on mining something Hernandez quickly discovered The young Hernandez had come to engineering, “an area where you need to the villagers were very good at. Brazil from Santiago, Chile, where he was know a little of everything because mines One farmer came to him and offered to born and raised. His parents, both of are isolated – so you need to understand sell Hernandez land that he did not need whom were professors, wanted electricity, mechanics, geology,

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manage different resources like people, ‘Working for a business The company did, in spectacular financial, technical. I think that was what fashion, with two new copper projects attracted me,” Hernandez says. association is a little like a – Manto Verde in the Atacama region In 1969, his fourth year, Hernandez public service because you and an ambitious plan to develop one pit went to live in France for a scholarship at have to work for the country, on top of all the underground mines and the prestigious École des mines de Paris. open pits of the existing Mantos Blancos He stayed nearly a further four years, the industry’ operation. The idea of an enlarged finishing his degree in Paris and later mega-pit was something that had initially validating it in Chile and Brazil. It was traveling 30 miles to the mine every day, been conceived when Hernandez was also where he built on his love of cooking, six days a week. “There wasn’t too much working at Mantos Blancos over a decade mastering paellas and empanadas while time to spend outside the mine!” earlier, but had been considered too risky seeking something different from the he notes. by former management. food served at the university cafeteria. Eventually the opportunity to move “When I came back to Mantos Blancos “Paris was great – it was one of the back to Brazil and develop a project I thought it was too late for the project, places to be at that time,” he reminisces. presented itself. Hernandez left Anglo but the country manager asked me, ‘why “It was also very hard work because the American and joined Rio Tinto at the don’t you look into it again?’” Hernandez academic standard was high. But I Morro do Ouro gold operation in says. “So we did, and that’s why Mantos survived and graduated there in Paracatu, Minas Gerais state, just as its Blancos is still alive today. Both projects mid-1973,” he says. feasibility study was approved. “I was were very interesting and successful.” number two for the project – firstly Anglo American asked Hernandez to Mining move working as the counterpart for the be the general manager of Mantos Hernandez, by this time married in engineering firm doing the project and Blancos Company, its main company in France to his Brazilian wife, took his first then the rest of the time organizing and Chile at that time. His remit included job in Sao Paulo with an engineering firm, preparing the company for production. everything but management of working on mining projects and That’s where I learned how to manage Compañía Minera Doña Inés de perfecting his Portuguese language skills. projects,” Hernandez says. Collahuasi, a joint venture in which It was the time of an economic boom in The mine, now owned by Kinross, was Anglo American was a major shareholder. Brazil and his services were in demand. commissioned by Rio Tinto in 1987 and Collahuasi was nonetheless very familiar Hernandez moved after a year to the produced about 50 tonnes of gold to him because Hernandez had tin-tantalum mine, then owned by through 1999, equivalent to about 9% of previously led the team to evaluate Anglo investment bank Banque de l’Indochine. Brazil’s total gold production in its American’s acquisition of a stake in the “I liked tin and tantalum very much. lifetime. copper operation. Even as a medium-size mine, we produced “Once I had completed my work at that 15% of world tantalum production and project, I was appointed in charge of the Collahuasi prices went from around $10 per pound development of new projects at Rio Tinto When the Collahuasi CEO left to more than $100 per lb at the time, so Brazil. However, I then received an offer unexpectedly, Hernandez was offered the we had a very good couple of years to return to Chile with Anglo to take over role on a temporary basis while the search enjoying great prices,” he says. “In that a gold project it was just starting,” for a full-time executive took place. job I worked on all aspects, including Hernandez recalls. He took the job. Seconded to the operation from June technical, people, taxes and accounting Based in Santiago, the Marte gold project 1995 until November that year, he must – it was really good training. I was quite was in Copiapó, Atacama region, Chile, have done something right because the young with a big responsibility and learnt where Hernandez travelled weekly. joint venture partners offered Hernandez a lot, in a very nice place,” he adds. But the role, he willingly admits, was a the role on a permanent basis. After four years the mine was sold to a “very tough experience, because we built, “I wasn’t a candidate originally, but European metallurgical group. commissioned and shut the project down they were satisfied with what I had done Hernandez stayed on for another two within three years.” during this six-month period,” years, and then decided to return “Everything went against us – the Hernandez says. “Taking the Collahuasi to Chile. exchange rate, gold prices, plus the gold role was a big decision for me because one His next role was as assistant general recovery was not what had been expected of the conditions was to leave Anglo manager at the Mantos Blancos copper from the feasibility study. It was very American – it was a joint venture firm mine in Chile’s Antofagasta region. tough, probably the hardest job I ever had and they wanted an independent Initially owned by the Hochschild Group, – very good training, but very expensive management,” he adds. before its sale during Hernandez’ time training,” he adds. It was the personal low He joined Collahuasi in 1996, as the there to Anglo American, the mine was point of his career, he says, but notes that project secured its financing package and then the country’s largest private copper Anglo American was incredibly began construction, spending nearly five producer. supportive throughout the experience. years at the project including through the “It is at Mantos Blancos that I mine’s first year of commercial learned a lot about operations because Mantos Blancos production. All his previous knowledge the mine was underground and open pit After the difficult time with the Marte came together, creating the biggest with an oxide plant and a concentrator – gold project, Hernandez continued to project worldwide in copper at the time. it was like two mines in one,” Hernandez work with Anglo American in Chile as It also gave him experience in working says. He spent over four years there, development manager. “We had to recover for a company with several shareholders, living in the port city of Antofagasta and our credibility,” he acknowledges. although the downside was the room

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for promotion was limited since he was ‘Mining is a great opportunity a moment when the contribution starts to already at the top of the venture’s be flat and then it’s time to move. If you management structure. To get around to work in an international don’t have another opportunity in your this, once construction was complete business for people that would organization then you don’t need to be Hernandez was authorized to spend like to manage large resources, ashamed to look somewhere else,” he says. some time working for business including human and financial’ “I’ve been lucky – I think all my moves associations, including as president of have been at the right time and, except Chilean mining trade association Consejo between Codelco and Antofagasta, I Minero and the board of the Chilean Codelco. A strong sense of national ended a job one day and started a new mining society Sociedad Nacional de calling swung the tough choice for him. role the next day. I always knew what I Minería (Sonami). “I left a very enjoyable role with BHP would be doing,” he adds. Hernandez’ next move was a return to Billiton to go to Codelco, firstly because I Stepping down from executive roles Brazil, this time to work with recently had the opportunity to once again be a has not eased his workload however, privatized mining firm Vale. It was 2001, CEO, and secondly because I love my because his three roles have him traveling and he was in charge of non-ferrous country and its mining industry, and I continually, something he enjoys and metals, which included two gold mines, wanted to give back what I had received,” recognizes was not common among his two kaolin mines, an underground potash Hernandez says. generation. When he does get some spare mine and then Vale’s first copper project, Once there, Hernandez spearheaded time, he reads and also cooks, although “I Sossego in Carajás. Codelco’s move to exercise a want to be on my own in the kitchen – not He speaks fondly of Vale’s former ceo, long-standing option to buy a minority with other people around!” he laughs. Roger Agnelli, a Brazilian banker, stake in the coveted Anglo American Sur Hernandez also enjoys his family. He entrepreneur, and corporate leader who properties, including the flagship Los has one son – a mining engineer – and was appointed to the role in 2001 while in Bronces mine. Before it could, however, three daughters, as well as seven his early 40s. “I spent two-and-a-half Anglo American surprised the mining grandsons, and is aware how critical their years with Vale under Agnelli, who was a industry with the sale of a stake to support has been. “To be able to work in real character! It was the first time where Mitsubishi, a move that Codelco argued this business you need to have a wife and my boss was younger than me,” he adds, violated the Chilean legal principle of family that supports you – we have crediting him with transforming the “good faith” by selling the stake moved I don’t know how many times, formerly bloated company into one of preemptively. An increasingly living in different houses, new countries Brazil’s top global groups. acrimonious dispute ended up in the and places,” he adds. courts; before it was resolved, Hernandez What would his advice be for a BHP Billiton resigned, citing personal reasons. twenty-something version of himself Although enjoying his role at Vale, “It was a challenging time, but I think starting in mining today? opportunity came knocking again when we did a lot of good things. Among “Mining is a great opportunity to work Hernandez was offered the role of head others, we exercised the option to buy in an international business for people base metals for BHP Billiton. “I thought back Los Bronces from Anglo American that would like to manage large that was a unique opportunity because it Sur – Codelco eventually succeeded with resources, including human and financial. was an international job, but based in that,” he says. “It was most unexpected Of course, there is a price to pay – you Santiago. There are not too many jobs for many people who didn’t believe have to move a lot, work in operations to like that,” he says. Codelco could make that kind of move,” understand how the business operates, So he joined BHP Billiton and spent six Hernandez adds. and that can be challenging and years with the mining giant, running a It was the first time in his career that he different,” he says. “You need a long-term global portfolio that included the didn’t have a role to go to, but not for perspective for the business or it won’t Cannington silver-lead mine in Australia, long: within a couple of months he work, but have to achieve short-term the Antamina copper-zinc joint venture became CEO of UK-listed miner results for shareholders or there is no in Peru, plus the Escondida and Cerro Antofagasta Minerals, a role he stayed in long term!” he notes. Colorado copper operations in Chile. until 2017, when he decided to leave “Irrespective of the sometimes During his tenure, BHP Billiton also built executive management positions. negative reputation that mining has, the Spence copper mine in the Atacama copper has a great future. It’s very region of Chile. Sonami and present day important and will be grow increasingly “That was great – BHP Billiton was a He is now back at Sonami, this time as its more important amid all the challenges of big company, and I learnt a lot there. president, and he has two other roles: as climate change and the move to When I joined Chip Goodyear was the board director of zinc-focused miner electromobility. It’s very important that CEO and extremely interesting to work Nexa Resources, controlled by we keep producing copper because it’s for,” he notes. Votorantim, and as adviser to the part of the future,” he concludes. It was during his time at BHP Billiton president of the Penoles-Fresnillo group that Hernandez was nominated for a in Mexico, which focuses on zinc, lead, Copper Club Ankh Award*, an honour silver and gold. “Working for a business *Copper Club 75th anniversary that he says was “very important” for him. association is a little like a public service See the special section on following But by the time of the award ceremony in because you have to work for the country, pages for further Ankh Award winner June 2010, he had left BHP Billiton, the industry,” Hernandez reflects. profiles and more on the history and having been offered the position of CEO “My approach has been I take a job, and activities of the Copper Club. of Chile’s state-owned copper producer, I enjoy it while I am learning. But there is

June 2019 | Metal Market Magazine | 25 MAKING A WORLD OF DIFFERENCE™ TO OUR ENVIRONMENT

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28 | Metal Market Magazine | June 2019 Copper Club 75th anniversary

a Washington hotel, was the first for what was How the club began later to become known as the Copper Club. A resounding success, the men decided at th the dinner to bring the industry together once In this 75 anniversary year of the Copper a year and look for ways to work together on Club, Fastmarkets special correspondent common causes in the meantime. And so was born the organization that exists today. Andrea Hotter has compiled a comprehensive Future dinners were held in New York, where a number of major copper companies account of the club’s history, its scholarship were headquartered. Although the organization started as a relatively small, and award programs, profiled some of its US-focused effort, the dinner grew to attract leading members, and obtained multiple people from around the world, including clients, and became an ultimate opportunity viewpoints on copper trends and outlook for the industry to come together. Initially there was an official membership process to join the Copper Club, but it was eventually decided that anyone working in the industry was a member of the club automatically. Just as globalization has changed the dynamics of the copper industry, so too has the membership of the Copper Club changed to reflect that trend. Two decades after its inception, the Copper Club created the Ankh Award to honor those that had made extraordinary efforts on behalf of the industry. This was followed in 1994, the Copper Club’s 50th anniversary year, by the launch of a scholarship award program with

COPPER CLUB COPPER the goal of developing students to play a The Copper Club’s inaugural dinner in 1944 positive role in leading the industry’s future. In an industry that has gradually moved A group of men met for dinner in Washington Calling themselves the Copper Club of away from integration to the separation of DC. It was December 1944, and the world World War II, the group – including production activities, the Copper Club has was at war. Little did they imagine that the representatives from mining, smelting, refining become all the more important in its 75th occasion would be the start of an annual and manufacturing – decided to have a dinner year as a means of bringing copper gathering that is still going strong during this to mark the winding down of its work as the participants together to promote and 75th anniversary year. end of the war approached. That meal, held in protect their businesses. The participants were representatives of the copper industry and part of President Franklin D. Roosevelt’s War Production Board (WPB), set up to two years earlier to help the US government serve the needs of World War II. Its work included converting industries from peacetime to wartime needs, allocating scarce materials and prioritizing the distribution of materials and services. Copper was key. “Silver is needed in the war effort: we have an acute shortage of copper, and since silver conducts electricity as well as copper, we can substitute silver for copper in many cases and use the copper thus saved for vital military applications,” said Harvey Anderson, chief of the WPB’s conservation and substitution branch in November 1942. As they worked together over the months, the various WPB copper delegates formed strong friendships, which strengthened over

lunches at the Union Terminal, the city’s key CLUB COPPER transportation hub. The Copper Cub’s 25th anniversary dinner in 1969

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“One of the frustrating things to a naïve Scholarship program young engineer was that we would come up with engineering solutions to issues and then The 25th anniversary of scholarships be told ‘no’, because it didn’t fit the permitting regime. That to me was a black Set up in 1994 during the 50th anniversary box that I couldn’t understand,” he says. year of the organization, the Copper Club From Golden Sunlight he went to work for Educational Fund has awarded over 150 the mining division of Montana Power, then individual scholarships and two special the main power provider for the region. grants, worth more than $1.2 million dollars McCarthy ran into similar frustrations there. in total. That includes eight scholarships this Trying to understand how the legal process year to students from different universities worked, he spent vast amounts of time across the United States. talking to lawyers. “Everything I was doing Recipients are selected by the was being dictated by lawyers. I decided I organization’s scholarship committee, either had to get past this frustration and currently operating under its third chair, accept it, or take action to understand it,” he Joseph Robertson. adds. The first chair was former Phelps Dodge He opted for the latter, enrolling in a executive and current Copper Club three-year graduate degree course in law at chairman Art Miele, who was succeeded by the University of Utah, focusing on natural Fred Demler, who is now global head of resources law. The move into law was initially metals at brokerage firm ED&F Man. unsettling – mining had been in his blood Michael Lockwood, principal of The Metals from birth. McCarthy’s great-grandfathers Risk Team, will take over the role this year. and grandfathers were all underground The grants are funded by companies with miners, and one grandfather in particular which many of the organization’s members tuition at Montana Tech. What he was not was a huge influence on him growing up. are associated. They include the Lord Bagri prepared for was the size of the check. “There were obviously thoughts of ‘did I scholarship, sponsored by the Bagri family, “I didn’t know the amount – $5,000 a year do the right thing?’ because I truly loved and the Barry Feldman Memorial – until I got the letter. To my knowledge, at engineering and the nitty gritty of solving scholarship, sponsored by Oskar Lewnowski the time at Tech there was no single tough engineering problems, and I knew I via the Langdale Foundation, Michael scholarship that was even close to this amount. would miss that,” he says. “So, while I was Farmer and David Lilley. It was a great feeling,” says McCarthy, who driven and focused and fairly certain I was The Colorado School of Mines also was studying mining engineering at the doing the right thing, there were always those distributes scholarship money from funds it Butte, Montana-based university. thoughts that, ‘Boy I’m going to miss invested as part of an endowment after being The grant enabled McCarthy to go to engineering.’ And I do,” he adds. given a one-time grant by the Copper Club. summer school instead of getting a The combination of engineering and law, Other scholarships are granted directly by temporary job, taking extra credits to both however, proved to be a winning ticket. In the Copper Club. ease his senior year and enhance his 2000, McCarthy started work at the law firm This year’s recipient of the Lord Bagri knowledge base. It also allowed him to of Parsons Behle and Latimer, a natural fit Scholarship is Curtis Johnson of the graduate from Tech without any student because of its century-long mining clientele University of Nevada, Reno, while the debt, with the financial cost of education like Rio Tinto Kennecott and Barrick. By Barry Feldman Memorial Scholarship being “a huge issue that’s only bigger now. I around 2008, mining had largely taken over has been awarded to Dirk-Philip Van Den always appreciated that.” his practice as commodity prices boomed. Berg, from the University of Kentucky. Emerging in 1995 from Tech as Then in 2016, a role opened up that Scholarships have also been awarded to Chris valedictorian, McCarthy started as an McCarthy says was like going home as he Osterhout of Virginia Tech, Kerst Kingsbury engineer for Placer Dome at its Golden knew the company well. That role was at of the University of Arizona, and Maria Sunlight mine in Montana, now owned by Barrick, where McCarthy is now the Pineda of the New Mexico Institute Barrick. It was a mine in transition, Assistant General Counsel US, based in Salt of Technology. undergoing a complex permitting process Lake City, Utah. Under the Colorado School of Mines that left McCarthy a little baffled. He remains extremely grateful to the endowment, scholarships have also been Copper Club for giving him a head start. “It’s awarded to Timothy MacInyre, Kaitlyn a wonderful and telling reflection of the Nagel and Jack Dombrowski. Copper Club that the scholarship program is still in place. Every once in a while A first recipient organizations come to a decision that When Michael McCarthy opened a letter impacts the lives of many, many people in a from the Copper Club, he was taken aback. very positive way, not to mention the benefit He had recently been told he was one of three it has for the industry,” McCarthy says. “It’s a first recipients of the association’s inaugural reflection on the people in the organization grants program and that he had won a that they would do something like this. It’s an scholarship towards the next two years of his outstanding scheme.”

June 2019 | Metal Market Magazine | 31 From one venerable metals institution to Happy 75th another, we’d like to wish the Copper Club anniversary a very happy 75th anniversary. We are proud to have worked with the from the London world’s copper community since 1877 Metal Exchange when copper became the first metal to be traded on our market. We send our best wishes to the Copper Club for the next 75 years!

SETTING THE GLOBAL STANDARD

7617_LME_Copper club_V2.indd 1 21/05/2019 09:36 Copper Club 75th anniversary

Copper Club scholarship winners 2013-14 2007-08 Anjelica Campos, New Mexico State University Meghan C. McGrath, University of Missouri-Rolla 2019-2020 Douglas “Ty” Conner, Colorado School of Mines Philippe Tetreault-Pinard, McGill The Lord Bagri Scholarship Recipient Tyler Faulkner, Virginia Tech Christopher J. Roos, Montana Tech Curtis Johnson, University of Nevada Deanna Fitzgerald, Missouri University of Technology & Science Juan Carlos Cortés Campos, Catholic University of Chile Barry Feldman Memorial Scholarship Recipient Timothy Gort, Colorado School of Mines Dirk-Philip Van Den Berg, University of Kentucky Jamie Lynn Mills, University of Arizona 2005-06 Chris Osterhout, Virginia Tech Jordan Oxborrow, Colorado School of Mines Filepe Nicolás Bernal Rebolledo, Catholic University of Chile Kerst Kingsbury, University of Arizona Jonathan Spring, McGill University James Joseph Martin, Virginia Tech Maria Pineda, New Mexico Institute of Technology Krysten Whearley, Northern Arizona University Dustin Meisburger, University of Arizona Timothy MacInyre, Colorado School of Mines William Yin, Queen’s University Kelly Ann Murphey, Montana Tech Kaitlyn Nagel, Colorado School of Mines 2012-13 Jack Dombrowski, Colorado School of Mines 2004-05 Andrew Carey, University of Utah Brady Butler, University of Utah 2018-2019 Sebastián Garrido Ortega, Pontificia Universidad Católica de Chile Kara Smith, Virginia Tech The Lord Bagri Scholarship Recipient Lynn Kern, Virginia Tech Jennifer Nekuda, Colorado School of Mines Cayley Brooks, University of Arizona Kyle Lindahl, Colorado School of Mines Barry Feldman Memorial Scholarship Recipient Michael MacArthur, Queen’s University 2003-04 Christopher Hareland, Rice University Scott McCue, Montana Tech Emily Bracken, University of Missouri Cameron Baker, Colorado School of Mines Tiffany Oney, Colorado School of Mines Lisa Schlink, South Dakata School of Mines Bon Durica, New Mexico Institute of Mining & Technology Kimberlin Schnittker, University of Texas at El Paso Tim Casins, Colorado School of Mines Seth Edelen, Colorado School of Mines Danielle Taran, University of Arizona Steven Shipley, University of Arizona Byron Hurtubia, Pontificia Universidad Católica de Chile La Fon Weston, Colorado School of Mines 2002-03 Luke McCulloch, Montana Tech Copper Club Mine to Mill Grant – Bestowed to the University of Laure Pate, Colorado School of Mines Alex Norris Virginia Tech Arizona, Department of Mining and Geological Engineering Monica Paul, University of Illinois at Urbana-Champaign Andre Gagne, McGill University 2011-2012 Emily Perry, Colorado School of Mines Steve Bundrock, Montana Tech Nolan Black, University of Utah Nathan Switzer, University of Missouri-Rolla 2017-18 Andrea Brickley, Colorado School of Mines The Lord Bagri Scholarship Recipient Valeria Contreras, Franklin High School 2001-02 Andrei Romascanu, McGill University Kalli Dinger, South Dakota School of Mines & Technology Elizabeth A. Niemi, Montana Tech Barry Feldman Memorial Scholarship Recipient Liz Hunter, Colorado School of Mines Jorge Peter, University of Missouri Kristopher Schaff, Montana Tech Ernesto Ignacio Santibanez Borda, Pontifica Universidad Católica Emily A. Sarver, Virginia Tech Emma Baker, University of Nevada, Reno de Chile Joseph D.White, Colorado School of Mines William Behre, Colorado School of Mines Jordan Rutledge, Colorado School of Mines 2000-01 Javier Cejas, Pontificia Universidad Católica de Chile Rebekah Simon, Colorado School of Mines Rachel English, Colorado School of Mines Jason Solomon, University of Arizona Grant Kaiser, McGill University Sean Klasen, University of Arizona Zachary Wappes, Virginia Tech Jennifer Conning, Montana Tech Evan McCombs, Colorado School of Mines Jordan Zampini, McGill University Bert Cantu, South Dakota School of Mines Bethany Witter, Virginia Tech Tohoku University* David Harding, University of Utah 2016-17 *Grant awarded for student aid due to the devastating 1999-2000 Barry Feldman Memorial Scholarship recipient earthquake Brian R. Buckham, University of Idaho Jennifer Jorgensen, University of Nevada, Reno 2010-11 Bradley J. Estes, Montana Tech Ian Brummel, Colorado School of Mines Ariane Erickson, Montana Tech, University of Montana David D. Michel, Queen’s University Cory Burkwald, Michigan Tech Julian Gastelum, Arizona State University David A. Neal, Virginia Tech Wesley Hall, Colorado School of Mines David Haviland, Queen’s University Bridger Hurley, Montana Tech Emma Janisch, Colorado School of Mines, Major: Metallurgical 1998-99 Jing Liu, The University of Arizona and Material Peter Collins, University of Missouri Tim MacIntyre, Colorado School of Mines George Jennings, New Mexico State University Joclyn Hunt, Montana Tech Zarifa McIntosh, Colorado School of Mines Joshua Morris, Virginia Tech Richard D. Murdock, Queen’s University Daniel Rowles, Virginia Tech Dana Specht, University of Arizona Arizona Roy T. Oommen, McGill University 2015-16 Christopher Storaker, Pontificia Universidad Católica De Chile 1997-98 Crystal Twenter, Missouri University of Science and Technology Katherine Burke, Missouri University of Science & Technology Michelle Langmaid, University of Arizona Sarah Williamson, New Mexico State University George Chapin, University of Utah Christopher Misterek, South Dakota William MacIntyre, Colorado School of Mines Maureen Chorney, Montana Tech Mindy Settles, University of Missouri Taylor Dawn, The University of Arizona Conor Pesicka, Colorado School of Mines Susanne Wilson, Queen’s University Madison Lytle, Colorado School of Mines Kimberly Conner, Colorado School of Mines Hannah Steadman, Colorado School of Mines Taylor Christenson, Morenci Jr. Sr. High School 1996-97 Joe Waite, Colorado School of Mines Cody Clark, Franklin High School Lauren Cockhill, Montana Tech Jiaxuan Zhang, University of New South Wales Kyle Edwards, Silver High School Kevin Kidd, Colorado School of Mines 2014-15 2009-10 Zvonka Nickolich, University of Missouri Ilse Alacantara, The University of Texas at El Paso Domingo Gustavo Lama Astaburuaga, Pontificia Universidad Gordi Wong, McGill University Católica De Chile Ryan Burton, University of Utah 1995-96 Andrew Mountford, Queen’s University, Kingston Ontario Elliot Britvec, Colorado School of Mines Stephen Antenucci, McGill University Nicole Loehr, Montana Tech, University of Montana Mara Erhard, University of Arizona Renee Balison, Montana Tech Wesley Hall, Colorado School of Mines Scott Shields, University of Arizona Chris Allen, University of Arizona Steven Piippo, Montana Tech of the University of Montana 2008-09 Myriah Santistevan, South Dakota School of Mines & Technology Jack Stratton, Montana Tech, University of Montana 1994-95 Felip Sarovic Allende, Pontificia Universidad Católica de Chile Liane Sandula, Queen’s University, Kingston Ontario Michael Holme, University of Missouri Jillian Trickey, Virginia Tech Skylar Cobb, Colorado School of Mines Kristi Linn Kelly, University of Arizona Joe Waite, Colorado School of Mines Andrew Storey, Virginia Polytechnic Institute Michael R. McCarthy, Montana Tech

June 2019 | Metal Market Magazine | 33 Congratulations Copper Club on your 75th Anniversary! Copper Club 75th anniversary

Ankh Awards In most of the past 57 years, the Copper Club has named an Ankh Award winner, presented during its annual dinner to honour outstanding individual achievements in and contributions to the industry

The first Ankh Award was given in 1962 to Clyde Weed, chairman of Anaconda Company, where he had worked for almost 50 years;

the last award was in 2018, to Harry (Red) Conger, President and CLUB COPPER Chief Operating Officer-Americas at Freeport-McMoRan. There Some of the past Ankh Award Winners at the Copper Club Dinner is no Ankh Award this year, with the organization instead in 2016. Front Row: Diego Hernandez, Oscar Gonzalez Rocha, Art celebrating its 75th anniversary with a special 1940s-themed Miele, Andrew Kireta Sr. Back Row: Brian O’Shaughnessy, Dan dinner at the Pierre Hotel in New York. Jones, Stephen Higgins. Named after the ancient Egyptian hieroglyphic symbol the ankh, the winner receives a trophy reproducing Auguste Rodin’s 25 years and a participant in most of the years since the famous bronze sculpture, the Thinker, often used as an image to organization’s inception. represent philosophy. Recent statues have been made of resin with A lifetime achievement award was also given in 2012, to Jürgen a brass patina. Leibbrandt, Codelco's Executive VP, Commercial Development, The Ankh Award was given to the copper-dominated Statue and in 2014, to Andrew G. Kireta, Sr., President & CEO of the of Liberty on the robed goddess sculpture’s 100th anniversary Copper Development Association. in 1986. Nominees are nominated by the copper industry and the winner The organization has also presented lifetime achievement selected by the Ankh Award committee. The cover profile section awards on three occasions. In 2007, a lifetime achievement award of this issue of Metal Market Magazine, and the following pages, was given to Tom Kennedy, president of the Copper Club for over profile several Ankh Award winners. Past Ankh Award recipients 2003: Arthur Miele, Senior VP of Marketing, Phelps Dodge Corp. 1986: Statue of Liberty, on her 100th anniversary and President, Phelps Dodge Sales Co., and Andronico Luksic, 1985: Frank Archibald, CEO, Southern Peru Copper 2018: Harry M. (Red) Conger, President and Chief Operating Chairman, Antofagasta PLC 1984: Roy Richards, Founder and former CEO, Southwire Co. Officer-Americas, Freeport-McMoRan Inc. 2002: The Lord Bagri CBE, Chairman of the Metdist Group 1983: George Atwood, Advisory Director for Pennzoil Co., 2017: Apurv Bagri, President & CEO, Metdist Ltd, and Gregory 2001: William O’Hagan, President & CEO, Mueller Industries Chairman & CEO, Duval Corp Christopher, Chairman & CEO, Mueller Industries, Inc. Inc, and Robert Payne, President & CEO, Copper Development 1982: Harold Lewin; Louis Schwab; Joseph Zimmerman – these 2016: Stephen T. Higgins, VP Marketing & Sales, Freeport- Association McMoRan, and Daniel L. Jones, Chairman, President and CEO, 2000: Marcos Lima, President & CEO, Codelco awards were bestowed on three industry veterans, though they Encore Wire 1999: Christopher Green, former Chairman, London Metal were not technically designated as Ankh awards 2015: Oscar Gonzalez Rocha, President & CEO, Southern Copper Exchange, and Norbert Brodersen, spokesman for the executive 1981: George Munroe, former Chairman, President & CEO, Phelps Corporation board, KME Dodge Corporation 2014: Andrew G. Kireta, Sr., President & CEO, Copper Development 1998: Charles Preble, President & CEO, Southern Peru Copper 1980: James Santini, US Representative for Nevada Association Inc, and Stuart Thorn, President & CEO, Southwire Corporation 1979: Maxie Anderson, President, Ranchers Exploration 2013: C. M. Koo, Chairman, LS-Nikko and Jim Vann, Chairman, 1997: Richard de J. Osborne, Chairman, President & CEO, Asarco 1978: Charles Barber, Chairman & CEO, Asarco Inc Rea Magnet Wire 1996: Stanley Craft, President & CEO, Essex Group Inc., and 1977: Plato Malozemoff, Chairman & CEO, Newmont Mining Corp 2012: Jürgen Leibbrandt, Executive Vice President, Commercial Lennart Gustafsson, retired President of the International Copper Alfred Powis, Chairman, Noranda Inc Development, Codelco, and The Men and Women, Past and Association and former CEO, Outokumpu Copper 1976: Present, of the Arizona Copper Industry 1995: Milton Ward, Chairman, President & CEO, Cyprus Amax 1975: Sir Ian MacGregor, President & CEO, Amax Inc 2011: Masayoshi Matsumoto, President & CEO, Sumitomo Electric Minerals Co 1973: Frank Milliken, CEO, Kennecott Corp Industries, and Laurence Golborne, Chile’s Minister of Mines 1994: The Copper Club marked its 50th anniversary with a 1972: William Meissner Jr., Head of the Copper Division, the U.S. 2010: Diego Hernandez, President of BHP Billiton Base Metals banquet and historical review in lieu of an annual Ankh Award Department of Commerce 2009: Richard Adkerson, President & CEO, Freeport-McMoRan 1993: Douglas Yearley, Chairman & CEO, Phelps Dodge 1970: John Eikenberg, Chairman & CEO, Revere Copper and 2008: The International Copper Association Health and Corporation Brass Inc Environment Team 1992: J. Burgess Winter, President & CEO, Magma Copper Co 1968: Robert G. Page, Chairman, Phelps Dodge Corporation 2007: J. Steven Whisler, Chairman and CEO, Phelps Dodge Corp 1991: Keith Hendrick, former Chairman, Noranda Minerals Inc. 1965: James Boyd, CEO, Copper Range 2007: Tom Kennedy, a lifetime achievement award 1990: Sir Alistair Frame, former Chairman of RTZ Corp 2006: Brian O’Shaughnessy, President and CEO, Revere Copper 1989: G. Frank Joklik, CEO, Kennecott Corp. 1964: Sir Ronald Prain, Chairman, the Rhodesian Selection Trust Products, and Juan Villarzu Rohde, CEO, Codelco 1988: G. Robert Durham, former Chairman, Phelps Dodge, 1963: Simon Strauss, Director, Magma Copper Co, former Vice- 2005: Takashi Sakamoto, recently retired, Chairman, Nippon retired President & CEO, Walter Industries Chairman, Asarco Inc Mining & Holdings, Inc. 1987: Bryon Halstead, CEO, Halstead Tube 1962: Clyde Weed, Chairman, Anaconda Company

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36 | Metal Market Magazine | June 2019 Copper Club 75th anniversary

Ankh Award winner 2003 New York City. Located directly opposite the former Phelps Dodge headquarters on Park Avenue, the Waldorf became a second home to Miele and his family over the years, having himself first stayed there in 1967 when he joined the international group. Art Miele He was planning a big celebration to There are not many mining executives before that trend became evident, but my mark his 50th consecutive year of staying who can say that they took on the Iranian interest was from the start in the there, but the hotel closed in March 2017 authorities headed by Iran’s first international side of the business,” he says. for renovations after being sold to Supreme Leader, Ayatollah Ruhollah At that time, Phelps Dodge was China’s Anbang Insurance Group. “We Khomeini, and won. Art Miele, who predominantly a US mining company would typically arrive and they would spent his career at former US with a few international operations, but say, ‘Welcome home.’ I was really very manufacturing and mining firm Phelps also a very diverse manufacturing disappointed!” he says. Dodge, is one that can. company active in 21 countries in all It was the 1970s and Miele – as aspects of the downstream metals Roles overseas manager, business development for industry. Moreover, the president and During his interview for his role at Phelps Phelps Dodge International Corp. – led chief executive officer of the international Dodge, Miele had told the international the effort to establish a presence in Iran. division was Danish, the chief operating unit’s CEO of his belief in globalization The joint venture company SICAB began officer was from the USA, one of its and his ambition to live abroad. “He said, manufacturing and selling a variety of senior vice presidents was Egyptian, and ‘if you’re any good we’ll get you overseas wire and cable products in Iran in 1974. another was from Cuba. in five years.’ Well, it took a little over six Everything had run smoothly until the Miele was quickly sold. “I said, ‘if they years to send me, so I might have been 1979 Iranian Revolution, which saw the offer me that job, then I’m in.’ They good but I wasn’t that good!” Miele laughs. overthrow of the country’s last Shah and offered me the job, as manager of His first overseas posting was in Puerto the end of 2,500 years of Persian business development,” he says. Rico, where Phelps Dodge had two major monarchy. “We had 26 expats involved Based in corporate headquarters in downstream manufacturing operations in SICAB, who were initially sent to India New York City, Miele’s first project was a – one copper/aluminium, the other steel. for what we thought was a temporary Chilean manufacturing company, which After this he moved to Caracas, period when we first saw the potential later formed the basis for Phelps Dodge’s Venezuela, where he ran the company’s dangers approaching in Iran,” involvement in Chile’s mining sector. He South American operations, including Miele recalls. was also involved in preparations for four units in Venezuela itself. The company’s workers never buying and growing a company in Brazil. To Miele, living in Venezuela was also returned. Phelps Dodge lost control of Miele’s new job also began a lifelong like going home. He had spent a SICAB and Miele was involved in the affair with the Waldorf Astoria hotel in significant portion of his courtship of his team that sued the Republic of Iran in the Florida-born wife – whose grandparents Hague. “Just as we were getting very had been diplomats at the country’s US close to the final resolution I received a Embassy – in Caracas during the 1960s. communication from Iran saying they Living at the home of her aunt and uncle, would love to talk to us about coming the latter an international lawyer, Miele back. We said ‘thank you, but no thank had written his thesis in the Venezuelan you!’” he says. capital, where foreign oil companies were Phelps Dodge won the case before the still the main game in town despite tribunal in 1986, receiving its original nationalization. investment of over $2.4 million plus “My wife, Susan, and I got engaged in interest in the deposition. Venezuela; we knew the country well and didn’t expect to return to live there, but International businessman ten years later we were back. We had a Miele began his career with Phelps network of friends so it was an easy Dodge in 1967, following receipt of a transition,” Miele says. masters’ degree in International Business “During the 1960s I had decided I from George Washington University, wanted to be a country manager, because where he majored in finance and those guys had it made! The problem was marketing. Phelps Dodge wouldn’t just let me Choosing a job in which he could travel manage a country – after a while they and develop an international perspective tacked on a region, which added had been central to Miele’s career choice complexity to my life. But that was a from the start. “My interest was in a great time,” he quips.

world that was starting to move towards CLUB COPPER It also worked wonders for Miele’s globalization. It took a good 15 years Art Miele at the 2018 Copper Club dinner Spanish language skills, which were

June 2019 | Metal Market Magazine | 37 TM

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minimal before moving to Puerto Rico – my experience supervising companies In addition to Lord Bagri, Miele he had instead studied Latin and French. around the world made it a pretty natural says that over the years those people “I took a Berlitz course for two weeks fit to move into that role,” he says. “The include former Phelps Dodge CEO and went off to San Juan speaking mining side of Phelps Dodge was really Douglas Yearley, ex-ICA chairman Spanglish, then got to Venezuela where gearing up to become global.” Lennart Gustafsson, former Magma they didn’t recognize Spanglish, so I had Copper CEO J. Burgess Winters, past to become a little more proficient in Board roles Codelco CEO Marcos Lima, ex-Mueller Spanish,” he says. “By the time we left The divestment of its manufacturing Industries CEO William O’Hagan, Venezuela I was fairly comfortable in the business highlighted an issue that still and former Nippon Mining chairman language. If you’re forced to read Julius concerns Miele today – the potentially Takashi Sakamoto, all of whom are Caesar in Latin then I guess you can make negative impacts that a non-integrated prior winners of Copper Club’s your way through any romance industry could have on copper. In Ankh Award. language,” he adds. particular, he was worried about the That honor was bestowed on Miele in Running Phelps Dodge’s South mining sector becoming divorced from 2003, the same year as his great friend, American operations took Miele all over the ultimate consumer, and concerned Antofagasta founder Androniko Luksic the region at a time of political upheaval, that the industry was not working – “We went to Africa together to visit with military dictatorships and conflicts collectively to protect its market copper mines and then we went on a common. Miele himself got from substitution. photo safari together. He was one of my inadvertently caught up in a student It led to the birth in 1989 of the favourite people.” protest in Bolivia, where he had been International Copper Association, “The biggest blessing of the Copper visiting a tin mine – “These little things spurred by Miele and six other executives Club and the industry has been the happen to you when you travel” – after from various industry corporates. people I’ve met over the years. Many being dropped in the square near his Spending on international activities were Ankh Award winners, as they were hotel by the head of the operation. rapidly rose from $3 million a year to iconic to the industry,” Miele adds. Miele was questioned by the police between $40 million and $50 million. Miele finished his career at Phelps before being escorted to his hotel. Several “Those of us involved understood you Dodge in Arizona, where he still lives years later he came across the same mine could be operationally not integrated, today. In addition to the commercial manager at a board meeting in Manila for but you had better have strong business, he also ran refining and copper Phelps Dodge’s Philippines Energy downstream relationships,” he notes. products operations, as well as the Products Corporation. “Small world!” He also became deeply involved in the Climax molybdenum business in Miele says. London Metal Exchange when he was Colorado. He retired at the end of 2006 After eleven years outside the USA, invited by its then-chairman, Lord Raj when he reached 65, but stayed in the Miele was, in 1982, offered a role in Bagri, to join the board. At that time, the copper industry, joining Rea Magnet either Bangkok, Thailand, or at LME was in the midst of a scandal, when Wire and becoming its non-executive international headquarters in Coral Yasuo Hamanaka, chief copper trader at chairman five years ago. Gables, Florida, adding Phelps Dodge’s Sumitomo Corp, was found in 1996 to Asian operations to his South American have accrued unauthorized losses of Future role. “My children had never lived on the billions of dollars. As he steps down from the Copper Club US mainland, so we decided it would be a Miele stayed on the board for the board, Miele is optimistic about the good time to bring the kids back,” he says. maximum ten-year limit, and was a future of the industry due to its role as a He had just spent three months in central part of the LME’s drive for key building block in everyday lives, but Lausanne, Switzerland, as part of the increased transparency, a move to he reiterates the need for it to be vigilant Harvard Senior Executive program, electronic trading, and demutualization and to work collaboratively. which took 40 professionals from across of the exchange. He became great friends “When I began my career in copper the the globe. Juggling his work at Phelps with Lord Bagri, who he describes as a industry was far more integrated than it Dodge with the study, Miele says the “mover and shaker, one of the real icons is today. This provided me with the company was getting him ready to move of the industry.” opportunity to gain first-hand experience into the senior C-suite of the corporation. He has also been on the board of the with all sectors from mining, smelting, It did not take long. In 1987, Phelps Copper Club for more than 25 years refining through manufacturing to the Dodge – which was slowly divesting its and has served as its chairman for the last end users,” he says. manufacturing businesses – decided to 12 years, although he is stepping down “For that reason, I have a strong move its headquarters to Phoenix to be this year. appreciation for the need for all sectors of closer to its mining operations in “It’s time to hand the role over to the the copper industry to come together and Arizona, and asked Miele to follow as vice next generation. I am very confident that defend its products from substitution president, commercial. under the leadership of Steve Higgins and promote current and new product “There were a number of very and the new board of directors, the applications. Organizations such as The well-qualified candidates for that Copper Club is in good hands,” he says. Copper Club, ICA, Copper Development position, but finally after a number of “I’ve been proud to be on the board and Association, International Wrought years, the forecast of my expectations to have had the opportunity to work with Copper Council and others are important that the world would move towards so many people in the industry that have vehicles for achieving this objective,” globalization was becoming a fact, and made a significant difference.” he concludes.

June 2019 | Metal Market Magazine | 39 Copper Club 75th anniversary

Ankh Award winner 2009 Richard Adkerson Richard Adkerson, chief executive officer an adviser on the newly merged company’s of the world’s largest listed copper transactions. producer, Freeport-McMoRan, was going The company moved its headquarters to to be an engineer until a bad experience New Orleans from New York in the changed his mind. mid-1980s and in 1988 completed an He had a summer job at a school-bus initial public offering for its Indonesian assembly plant following high school in subsidiary. The year prior, 40-year-old Kosciusko, Mississippi. It was good work, Adkerson moved to Chicago to become but the working conditions then were poor head of Arthur Andersen’s global public – clay floors, no air-conditioning and company audit practice. It was then that inadequate safety procedures. “I saw two internal bickering between the firm’s people get pieces of their hands cut off. One consulting arm and the traditional day I came to work and there was a thumb accounting/audit firm caused his devotion on my machine!” Adkerson recalled. It to the firm to wane. Adkerson made the pushed a math-minded student towards decision to move back to Houston after business and made a lasting impression completing the Advance Management about the importance of workforce safety Program at the Harvard Business School. that Adkerson took with him when he Word got out that he was not entirely joined the mining industry 25 years later. happy and, after some competing offers, he Adkerson grew up in small towns in the joined Freeport as a financial dealmaker in US Deep South. He was more interested in 1989. It was the same year that Chip

playing football and baseball than anything FREEPORT-MCMORAN Goodyear, the future head of BHP Billiton, else until he aced his college entrance test The path to create Freeport-McMoRan was joined Freeport; the pair formed an and became a National Merit Scholar, complex, but Adkerson was there from “exceptional partnership,” Adkerson said. something Adkerson said “surprised almost the start everybody.” Mining the moon He ended up going to Mississippi State petroleum land man and business Freeport quickly determined that its University, where, after the experience at executive. Grasberg discovery was a game-changer. A the bus factory, he asked the Associate Adkerson spent the next five years long-lost geology paper on the highest Dean at the College of Business for working closely with McMoRan in New mountain on the Island of New Guinea academic advice. “He told me that Orleans as the company grew, until another resurfaced, leading Freeport to visit the site accounting is the language of business, so I opportunity came his way – an accounting in 1960. Recognizing its potential, majored in accounting,” Adkerson said. fellowship with the Securities & Exchange Freeport negotiated and signed its first “Accounting is one of those light-switch Commission (SEC) in Washington, DC. Indonesian contract in 1966, developed deals – you either get it or you don’t. I got When his term at the SEC ended in the small high-grade deposit and started it, and I also liked it,” he added. 1978, Adkerson moved to the heart of the production in 1972. With a degree, an MBA and Certified oil and gas industry in Houston and became It took until 1988 – the year before Public Accounting qualification under his one of Arthur Andersen’s youngest ever Adkerson joined Freeport – for the firm to belt, he joined Arthur Andersen in New partners, age 31. An expert in SEC matters, drill a grassy ridge named ‘Grasberg’, Orleans. In December 1970, he was within a year he became head of Arthur located three kilometers from the original assigned his first principal client: Andersen’s worldwide oil and gas practice mine. That same year, Adkerson made his McMoRan Exploration Co. during the tumultuous 1980s and he first trip to Freeport’s operations in resumed his working relationship with Indonesia and snapped a Polaroid photo of Working with McMoRan McMoRan. the Grasberg exploration shack that is The path to create Freeport-McMoRan While all this was happening, a mining framed on the wall of his office today. The was complex, but Adkerson was there from company with its roots in the sulphur rest is history. almost the start. McMoRan had just been business was quietly developing what – After a series of assets sales and founded when Adkerson walked into its unbeknown to it – would become one of innovative financings, in 1992 Adkerson offices. There were 16 people with the the industry’s greatest mines. Established was made CFO and Goodyear was Chief company at that time, including the three in 1912, Freeport Sulphur became Development Officer of Freeport. In the founders, Ken McWilliams (the ‘Mc’ of Freeport Minerals, having added other mid-1990s, Freeport spun-off its copper McMoRan), Jim Bob Moffett (‘Mo’), both resources to its portfolio. In 1981, Freeport business as well as its oil and gas unit, geologists, and Mack Rankin (‘Ran’), a merged with McMoRan. Adkerson became leaving the agricultural minerals business

40 | Metal Market Magazine | June 2019 with the parent. Adkerson moved with the former, and Goodyear became CFO of the latter, which was ultimately merged into what is now Mosaic. During this time, Grasberg was being developed “in an extraordinarily rapid fashion,” said Adkerson. After the company faced liquidity issues during the mid-1990s, in part because of the parent’s dividend policy, another miner, Rio Tinto, made an investment to help finance Grasberg and it became a partner in the project in 1995. Within a couple of years, the major development of Grasberg was completed. Freeport was widely viewed as a relatively small but interesting company, and things were going well. Adkerson was now Freeport’s president, with Moffett the chairman and CEO. But in May 1998, Indonesian President Suharto stepped down. It was in the midst of the Asian financial

crisis, and the contagion spread globally. FREEPORT-MCMORAN “Grasberg took all our focus: everybody Ringing the closing bell on the NYSE on the day of Freeport-McMoRan’s merger with rolled up their sleeves and thought about Phelps Dodge in 2007 how to develop it for the long-haul,” Adkerson said. Yet times were difficult: naturally fit with other mining or pure gold have a global focus, something I targeted all copper and share prices slumped, and the companies; plus it was in Indonesia, which my career,” he said. company repurchased a third of its stock had lingering political risk implications. Having initially planned to pay off $10 when its value fell, in anticipation of a One company that Adkerson had his eye billion of debt in four years, Freeport did so revival that was not quickly forthcoming, on, starting in the 1990s, was Phelps in nine months. But the new unit was which created another liquidity crisis. Dodge, a major copper producer with large quickly tested by the 2008 financial crisis; Adkerson started working closely with low-grade deposits. A deal was elusive until “That’s when our organization really came company treasurer Kathleen Quirk, and the 2006, when Phelps Dodge was under together,” Adkerson added. Freeport pair set about working towards restructuring pressure by an activist investor and immediately shut down its expansion the company’s balance sheet. “It was responded by attempting a complicated projects while it watched the price of boot-camp training for what we had to deal three-way transaction in which it would copper collapse from $4 to $1.20 per lb by with just a few years later,” Adkerson said. acquire Inco and Falconbridge. It failed, the end of the year, with expectations of Then, in 2003, China emerged as a major losing out to Vale and Xstrata, respectively. further declines. It also cut costs, improved developing economy, and the world came Freeport’s bankers suggested the miner productivity and reduced output. out of recession. “Grasberg was fully purchase Phelps Dodge, something that The company developed plans to developed and we started making money initially amazed Adkerson. “I recall operate its mines in the US and South hand over fist. We paid off all of our debt thinking, a short-time earlier we’d been America at break-even, and to use the cash and were distributing large amounts to really financially stretched, and now we flows from Indonesia to fund debt servicing shareholders,” Adkerson added. were being told we could do the largest and G&A. Fortunately, the macroeconomic merger ever done in the mining business,” backdrop turned positive much more Phelps Dodge deal he added. quickly than expected, and, aided by the At the end of 2003, Adkerson became CEO Given the green light by the Freeport company’s actions, by 2011 the company and Quirk became CFO; Moffett was board, in August Adkerson called Phelps was debt free, its share price was at record chairman, largely focused on the separate Dodge CEO Steve Whisler with an offer to highs, and Adkerson thought the company oil and gas business. Adkerson’s attention pay a market premium. The deal was was set up for large cash returns of turned to the future of Freeport – a announced at the end of November, and shareholders and long-term success. single-asset company, which was not was received with shock. “Nobody thought Unfortunately, that situation did not last sustainable. “We talked with a number of Freeport could do it,” Adkerson laughed. for long. Freeport was hit by a double bankers and companies about strategic The acquisition was a high point in whammy of Indonesian contract ideas – in the back of our minds, we always Adkerson’s career. “It was a big decision for renegotiations and an ill-advised thought someone would come in and buy me to take on the Phelps Dodge challenge investment in oil and gas, which Adkerson us,” Adkerson admitted. in 2006 when I was 60, a time when many said he adamantly opposed. But they could not find the right deal. consider doing something different and I Grasberg was an unusual orebody – have a lot interests away from work. But it Oil & gas roughly two-thirds of the value was in was a dream come true for us to acquire a The oil and gas investment was first copper and the rest was in gold, so it did not company more than twice our size and proposed in early 2012, by Moffett and

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about trying to unwind its related capital build a smelter the government wanted; in expenditure commitments, including return, the company would be granted an restructuring drill contracts. Sumitomo, a extension of its operations through 2041 long-time joint venture partner of with legal and fiscal certainty, with any Freeport’s copper business, bought an divestments to be at fair market value and additional stake in Morenci; the company Freeport continuing to manage the was forced to sell Tenke Fungurume to operations. China Molybdenum, something that In the midst of this, Rio Tinto made it Adkerson says he would not have done clear that it was interested in selling its 40% under different circumstances. stake in Grasberg, something Adkerson In early 2016, the company set a goal of described as creating an opportunity for cutting its debt by $5-10 billion within two “an elegant solution” in which everyone

FREEPORT-MCMORAN years; by the end of that year it had already would win. Rio Tinto would get to exit Signing ceremony in Jakarta for cut it by $10 billion, and continued Grasberg at an acceptable valuation; the divestment agreement reducing it in 2017 and 2018. government would get its desired stake and a commitment to a new smelter; Freeport some Freeport board members. The idea Indonesia would sell a far smaller stake than initially was to diversify the company into an area While all this was taking place, Freeport envisaged and receive an extension of its in which its management had experience at was fighting a battle on another front – rights to operate Grasberg with legal and a time when its mining expansion projects over the fate of its Indonesian investment. fiscal certainty. A definitive agreement was were coming together and the company Things had been running relatively signed in September 2018, marking was generating strong cash flow from smoothly there until the country passed a another professional high for Adkerson. then-high copper prices. Adkerson was not new mining law in 2009. Early indications The company’s focus for the next two supportive, aware that Freeport were that it would not apply to Freeport years is now on completing the transition shareholders wanted exposure to copper because of its established contract. It was from open-pit to underground mining at and China, not oil and gas. not until 2011, when the new regulations Grasberg, ensuring the new partnership But the notion carried the day at the were adopted, that Freeport’s contract for its smelter is a positive one for all Freeport board level, with Freeport going started to be undermined. stakeholders, and running the rest of its on to acquire Houston-based Plains By 2013, Freeport thought its business to ensure that it maximizes Exploration & Production Company, as contractual issues were resolved, but a production and controls costs in a safe way, well as McMoRan Exploration Company, last-minute decision in January 2014 Adkerson says. of which Adkerson was co-chairman, a effectively banned the company’s exports “Our intention is not to look to make situation that meant he was conflicted and – “a total surprise” to Adkerson and his major investments or engage in M&A precluded from voting on the deal. team. Efforts continued over the next activity. We’re going to continue to study He said that he almost quit over it. “It couple of years, with various twists and potential future investments, but we’re not was a tough decision for me – I came close turns, until new regulations were going to pull any triggers on big projects in to leaving,” he admitted. But he stayed, announced at the end of 2016 that the the next two years until we get some clarity feeling a responsibility to the company’s government believed resolved the on the global markets, which are very employees, shareholders and the situation. They did not. unclear right now,” he added. communities where Freeport operated. “It was very difficult. I remember When he is not traveling, attending In mid-2014 oil prices started landing in Jakarta as these regulations events associated with his former collapsing, followed by copper prices later came out and my email was lighting up university, or working with the US that year. By the fall of 2015, things had with people congratulating me for having National World War II Museum in New really deteriorated and the severity of the solved the problem. I hadn’t even seen the Orleans, Adkerson’s great love is the situation had become very clear. The board regulations,” Adkerson recalled. “When I outdoors, and particularly the mountains, started the process of restructuring, a read them, I called the government and where he rides horses, hikes, fishes and situation hastened when activist said, ‘This just doesn’t work, we can’t hunts. He said that his best pals are his shareholder Carl Icahn took an 8.5% stake accept this.’” labrador retriever, Carly, and his German in Freeport. Moffett left at year-end, Negotiations hit an impasse, and shorthair pointer, Sis – Adkerson replaced by current chairman Gerald Ford. Freeport filed a notice of arbitration in describes himself as their “emotional The year ahead was a “tough, tough, February 2017, with Adkerson conducting support human.” tough time,” Adkerson said, noting that the a press conference in Jakarta to highlight He also loves spending time with his company had gone from being cash rich to the company’s stance. The approach three sons – Ryan, Tyler and Clark – and having $20 billion of debt. “Commodity worked: talks resumed, a temporary two granddaughters – Reese, aged five, prices were terrible. There was a lot of extension for exports was provided, and and Cora, two; Adkerson’s eyes light up speculation that we just weren’t going to extended again to allow for discussions, whenever they’re mentioned. make it. We started trying to sell oil and gas leading to a broad-terms framework for an assets in the fourth quarter of 2015 and agreement later that year. This profile is based on a cover profile there were no buyers.” Freeport agreed to meet the interview first published in the November- Freeport changed the oil and gas government’s aspirations to own a 51% December 2018 issue of Metal Market management in early 2016 and then set stake in Grasberg and said that it would Magazine.

June 2019 | Metal Market Magazine | 43 Copper Club 75th anniversary

Ankh Award Winners 2002 and 2017 of the need to protect the LME’s unique trading methodologies of open outcry and the inter-office telephone market. His link to the trading floor was intensely personal. Lord Bagri created Metdist Trading, which in February 1970 became one of the first two overseas members of the Apurv Bagri exchange, something he described as one of the highs of his career. Rather fittingly, a portrait of Lord Bagri, who died in April 2017, age 86, is etched into a copper cathode hanging in the mezzanine gallery of the LME, overlooking the trading floor. When his son Apurv Bagri joined the business in 1980, Metdist represented a very different operation to the group today: its core activities centered on LME brokerage and an India-focused merchanting business. But things were starting to change. That same year, the group established its manufacturing arm in the form of a copper rod business in Malaysia, initially with a 10,000 tonnes per year capacity. From father to son With his passion being the LME, Lord Bagri handed over the day-to-day running of the physical merchanting business to his son – a separation that Apurv Bagri believes was highly beneficial for both and that enabled him to become involved with its trading from an early stage. At that point the LME brokerage was never focused on being a significant commercial entity; instead it was “part and parcel of what we saw as our involvement in the global metals business,” Apurv Bagri says. “At its simplest level the LME

METDIST brokerage was an important part of being a Metdist’s Apurv Bagri member of the community, and on another level, we always believed that it There are few names that are synonymous shareholder-owned exchange, gave us insight and a seat at an important with copper, the London Metal Exchange which in turn facilitated the market’s table around which we could understand, (LME), and the global metals industry, but modernization and ensured its learn and grow within the non-ferrous Bagri is indisputably one. Both Lord Bagri, continued growth. metals arena,” he notes. “The LME CBE, the longest serving chairman of the He oversaw the introduction of an brokerage business survived in that LME and founder of The Metdist Group, electronic trading platform, launching capacity for decades,” he adds. and his son, Apurv Bagri, have been LME Select in February 2001, convinced The rest of the group grew significantly honoured with the Ankh Award, in 2002 that the exchange could not let technology as the years progressed, but Metdist and 2017 respectively – the only father move ahead without it. His hands-on Trading was left to operate as a value- and son to have achieved this honour. guidance, unwavering belief in the added component. By 2014, it became With a career that commenced at just exchange and dedication to the metals clear that it was time to develop a 15 and went on to span eight decades, world that he loved is credited to the LME long-term strategy for the unit; as Lord Bagri oversaw some of the most emerging unscathed and, remarkably, a Apurv Bagri says, “a suboptimal size significant moments in the LME’s history. stronger market, following the 1996 LME brokerage business was no longer He championed demutualisation in Sumitomo Crisis. necessary from the point of view September 2000, transferring the market He never forgot his roots in the trade of the group’s global involvement from a cooperative-structure to a private and industry and was a strong proponent in metals.”

44 | Metal Market Magazine | June 2019 “By that time the group had begun to him when he was in hospital that I had flex its financial arms and invest in other received the Ankh Award, and to this day non-metals businesses, and we wanted to I don’t really know if he understood me, convert our LME brokerage arm to a though I pray that he did,” Apurv Bagri says. substantial independent operation,” He remains amused by a ritual he notes. established by his father and Art Miele, The problem was that to achieve this former Phelps Dodge executive and 2003 would have required very significant Ankh Award winner, who were close capital, including sizeable credit facilities friends. Miele was on the LME board for clients, Apurv Bagri acknowledges. during Lord Bagri’s tenure as its chairman, “The view we formed was that very and for years after each meeting the pair honestly we could do more with that would have tea at London’s Inn on the money than give it to someone else via a Park hotel. credit line; which realistically was a “I used to go and pick up my father on business better suited to financial METDIST the way from the office. Sometimes I sat institutions and banks,” he adds. Apurv Bagri with his daughters, Amisha there for a few minutes, sometimes I Enter Nigel Dentoom, a long-term and Aditi didn’t, but 100% of the times that I came, I associate of the Bagri family, fresh from his was the one that paid the bill for the two of role as chairman of LN Metals, with a for that business, and it’s a very important them,” Apurv Bagri laughs. diverse career in both LME brokerage and part of what we do,” says Apurv Bagri. “I always used to complain to both that the physical metals industry. Tasked with “There probably isn’t a house or building the tea was theirs and I was only the exploring and implementing ways to in Malaysia that hasn’t been touched in delivery and pick-up boy, and yet I got develop and expand Metdist’s LME some way by one of our products,” he adds. saddled with the bill. Art and my father operations, Dentoom set about delivering Malaysia’s Prime Minister Tun had almost made it a tradition that they the criteria set by the group for the Mahathir bin Mohamad was recently would have that tea knowing I would turn brokerage’s future. guest of honour to inaugurate an up and settle the account,” he adds. “We wanted to maintain a shareholding expansion at the group’s rod plant, an Apurv Bagri is himself on the board of and to be part of the exchange, not just for unusual move for the now 93-year-old and Hong Kong Exchanges & Clearing, owner historical reasons but by being associated testament to Metdist’s decades-long of the LME since 2012, something he with a very large substantial financial presence in the country. The completion regards as a “great privilege.” He sits on group,” Apurv Bagri says. of the expansion marked a poignant numerous other boards, including the With the immediate benefit of brand, moment for Apurv Bagri as it is the final Dubai Financial Services Authority, of history, and a passage to its Indian roots, deal that he worked on with his father. which he has been deputy chairman Metdist Trading was a very attractive “The last set of conversations my father since June 2017, and the International acquisition. Presented with several and I had were around the expansion and Wrought Copper Council, which he also alternative partners, the brokerage reorganization of the metal fabricating previously chaired. eventually partnered with China businesses – these are the last transactions His great passion, meanwhile, is Construction Bank Corp (CCB), that he really signed off on and said that we education and mentoring. Apurv Bagri is a completing a deal in April 2016 to sell it a should do,” Apurv Bagri says. member of the Corporation of University 75% stake in the firm and handing over College School and honorary rector and responsibility for running the business A new era former pro-chancellor and chair of to CCBI. The other central players driving the Council of City University, London. The new entity was renamed CCBI expansion were Apurv Bagri’s two He is also a visiting professor at Cass Metdist Global Commodities (UK) Ltd, daughters, Amisha and Aditi. “At the end Business School, of which he is an becoming the first company majority- of the day, the fundamental question for alumnus, and is a past chairman of TiE owned by a Chinese bank with Category 1 the family is around what do we do for the Inc., a global non-profit organization that membership of the LME. “It brought next generation. We are committed to a promotes entrepreneurship and wealth together CCB’s expertise in China and our very substantial presence in the copper creation. interest and involvement with India. The fabricating business and it is now of a scale Apurv Bagri also holds the highly sense was that, combined, we’d have the and size that is quite important,” Apurv prestigious position of chair of the capacity to serve customers and clients Bagri adds. governing body of the London Business across two of the most populous and His daughters were present when School, a constituent college of the federal potentially fastest growing economic Apurv Bagri received the Ankh Award in University of London. He has been giants of the century,” Apurv Bagri says. 2017; as he recalls, “Their public involved with the school for over 18 years, Meanwhile, the group’s copper statement at the time was, can you explain holding an honorary fellowship and having fabricating business had grown. Over the to us why there has been no Copper overseen its recent highly successful years, Metdist added an air conditioning Woman of the Year in the history of the fund-raising campaign. and tube plant to its Malaysian operations, award?” The award was a bitter-sweet “The biggest thing in my life is education,” and almost 40 years on has a combined moment for Apurv Bagri, coming 15 years Apurv Bagri says. “My girls say I am rod, wire and tube capacity of 350,000 after Lord Bagri’s own Ankh Award, and involved with education all the time; I say tonnes per year. “It’s been quite a journey two months after his father’s death. “I told I do it in my spare time,” he adds.

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46 | Metal Market Magazine | June 2019 Copper Club 75th anniversary

Ankh Award winner 2003 Andrónico Luksic Andrónico Luksic Abaroa grew up in the Japanese firm Nippon Mining Company per year, up from 350,000-355,000 tpy. town that he would eventually name his for $500,000, a sizeable fortune at the The group also owns Centinela, London-listed copper producer after: time. It allowed him in 1954 to create located in the Antofagasta region and Antofagasta, in the north of Chile. Luksic Group, which would eventually formed in 2014 from the merger of the But mining was not part of the career become a vast Chilean conglomerate Esperanza and El Tesoro mining he initially envisaged. The son of a comprising operations in not just mining companies, which had been producing Croatian immigrant, a young Luksic but also fishing, manufacturing, since 2001. Also in the region, the group studied law in Santiago and attended the electricity, food processing and forestry. owns Antucoya, which has been mining Sorbonne in Paris, returning eventually The group expanded during the 1970s and leaching oxide ore to produce to his home town to work for a local law outside Chile, adding businesses across copper cathodes since 2016, and firm. Frustrated at the lack of career Latin America while navigating the Zaldivar, a joint venture with Barrick advancement, Luksic left the firm for a intricacies of Chilean politics at the time. that Antofagasta operates. career in business. His acumen paid off – in 1979 the group Last year, Antofagasta produced He first turned his attention to a Ford added the Antofagasta & Bolivia Railway 725,300 tonnes of copper, up by 3% on auto dealership in which he had a small Company to its investments. 2017 levels. stake purchased from money earned When the time came for him to retire, during his student days. At that time, the Antofagasta and copper Luksic divided the running of the various Antofagasta area was booming as the Using Antofagasta as a vehicle, the group businesses within his group among his copper industry developed, and the increased its mining interests through a children. His oldest son, also named dealership was supplying the local series of acquisitions and expansions. In Andrónico, now manages the family’s mining community. 1996, Antofagasta consolidated all its banking interests; his middle son, It did not take long for a move into non-core banking and industrial Guillermo, ran the Quiñenco companies copper – Luksic was approached to buy a interests into the Luksic family until his sad passing in 2013; his 25% interest in a nearby mine. A keen conglomerate, Quiñenco, in order to youngest son, Jean-Paul, is chairman of amateur geologist, Luksic jumped at the focus on mining and transportation. the mining operations and took over the chance. He struck a deal to buy the stake The Antofagasta that the copper Quiñenco companies after his brother in monthly installments spread over 25 industry knows today really grew after died. Luksic’s daughters, Paola and years, but very quickly managed to buy that. Located in Chile’s Coquimbo María Gabriela, oversee the family’s out the remaining shareholders to own region, 240 km north-east of Santiago, charitable foundations. the mine himself. Los Pelambres started production in Luksic, who was awarded the Ankh The purchase proved to be a boon. A 1999 and is now undergoing an Award in 2003, died two years later in couple of years later Luksic sold it to expansion to take it to 400,000 tonnes Chile at the age of 78.

ANTOFAGASTA Antofagasta’s Los Pelambres mine is undergoing expansion to take it to output of 400,000 tonnes per year

June 2019 | Metal Market Magazine | 47 Copper Club 75th anniversary

now, with lower ore-yield bodies and the One hundred words on copper metal’s increasing use in electric vehicles, plus for IT and medical purposes, as the Andrea Hotter asks leaders in the world of recurrent theme of “sustainable copper” continues to drive demand. Scrap – copper production, trading and application ignorant regulators please note, it’s a recyclable raw material, not “waste” – to sum up their views on the outlook for the champions the ever-enduring, constantly metal in about 100 words glowing, future for the red metal that glisters as much as gold, but in much greater profusion – copper! Danny Malchuk, president operations, BHP Minerals Americas Bernie Schilberg, CEO, The outlook for copper is undeniably Prime Materials Recovery positive, but there are significant The only certainty over the next two challenges to achieving its potential. The decades in the copper industry is that world needs more high-quality copper, but market dynamics will change significantly finding, accessing and extracting it – more than has happened during the past

economically and sustainably – is becoming ANTOFAGASTA two centuries. Copper resources presently more complex. New deposits will require are not sufficient to satisfy projected future ever-increasing water and energy intensity, market participants focus on the demand. Policy and technology will lead to in a world where access to these is becoming sustainability of demand that has driven innovation in mining, refining, recycling, increasingly constrained and politically the copper market for the last decade: fabrication and trading, impacting the sensitive. Economies will continue to construction, China, automotive; but the downstream markets. It will be critical for decarbonise and electrification and market now must look to growing industry participants to heavily support renewables will drive demand. At the same electrification trends, smart grids, training in human development and make time, end consumers of copper-intensive biological applications and so on. Those significant investments in capital projects products are more ethically minded, and trends are accelerating and the upside is to compete in this global economy. The care about how and with what those potentially significant. It is well known that future and opportunity has never been products are made. ‘Green’ copper is the to meet those demand upsides, finding the so evident. key to unlocking our future. The industry medium-term supply will be challenging, must work along the supply chain so that requiring new incentive prices to engineer Paul Crone, head of metals copper is discovered, mined, sold and used the necessary results. proprietary trading, Engelhart sustainably for generations to come. Commodities Trading Partners Tom Albanese, lead independent Why is copper so interesting? Betting on Arnaud Soirat, CEO, director, Nevada Copper the price of copper is a very popular way to Rio Tinto Copper & Diamonds Copper markets stand to benefit from both express a macro view on the world given its Rio Tinto continues to see significant supply and demand drivers. On the industrial importance. The future of the opportunity in copper, with the world demand side, the shift toward E-Vehicles copper market, one of the top three metals expected to need the same amount in the and the conversion of our hydrocarbon- consumed globally, remains structurally next 25 years that it produced in the last based economy toward a more sustainable sound given the easy access to trade 500 years. This is being driven by renewables-based economy will lead to futures and options via the three major fundamental changes in society: improvements in copper consumption. exchanges as well as physically. The level of urbanization, industrialization and Copper supply growth will meanwhile be global participation continues to increase renewable energy. Copper plays a key role constrained by declines in some of the as copper remains extremely sensitive to in electrification and power production; world’s largest copper mines, further China, the largest consumer and one of the for example, a wind turbine capable of pressured by the effects of both reduced largest producers of the metal. The key generating a megawatt of power – enough capital spending and increased stakeholder drivers of price being consumption, to supply several hundred homes – needs pressure delaying major new projects. production, the US dollar and oil, along more than three tonnes of copper. We are Short term, these positive forces are being with unforeseen events such as strikes, well positioned to meet this demand with tempered by trade tensions and GDP earthquakes and geopolitical instability, tier one operating mines on three concerns, but they will become more ensure that speculative interest will continents and outstanding growth evident as metal balances tighten. remain abundant. options. Michael Lion, CEO, Everwell Jürgen Schachler, CEO, Aurubis AG Mark Hansen, CEO, Concord Resources Ltd and Lion We expect a constant, good supply of Resources Limited Consulting Asia Ltd concentrates in 2019 – the higher copper Copper is now the most interesting I can’t say how often I overpaid for bright price remains a strong incentive for the metal market. The evolution of demand shiny copper scrap from Hong Kong to mines to boost their output and force applications is an exciting positive for LA, but it didn’t matter – someone always supply from new mines and extensions. the market over the next decade. Many needs copper! That’s particularly the case However, there are some clouds on the

48 | Metal Market Magazine | June 2019 of the concentrates market, a decline in copper demand due to the global recession, a tightening of global environmental and safety regulations, and the increasing cost of energy and continuous production. In this environment, LS-Nikko Copper is striving to define its key competitiveness through investment in environmental/ safety facilities and establishment of proactive management systems, the stable procurement of raw materials, and stabilized operations with strengthened productivity and efficiency. Through digitalization, LS-Nikko Copper will

ANTOFAGASTA establish a smart factory, optimized for its smelting business, to execute these key horizon, with lower supply from Grasberg Kostas Bintas, head of copper competitiveness factors and to become the and more smelter capacity coming online in trading, Trafigura global no.1 smelter. Based on this vision, China. But the healthy concentrate market Copper remains an essential raw material LS-Nikko Copper will continuously fundamentals as well as maintenance of for the sustainable development of our strengthen its cooperation with suppliers multiple smelters will reduce smelter demand modern lives and societies. Its superior and customers to acquire sales and stable and keep the market in balance. Furthermore, conductivity and durability properties will raw material procurements. with our ability to process more complex continue to enable strong growth. Vehicle concentrates, we are not as dependent on electrification and renewable energy Oskar Lewnowski, founder the benchmark as most of our competitors. sources are expected to grow exponentially and chief investment officer, So for 2019, we are still confident. in the coming years, and these ‘industries Orion Resource Partners of the future’ tend to be more copper Economic revolutions require feedstock, Kathleen Quirk, executive vice intensive, which will support demand and usually a commodity, to transform lives. president and chief financial officer, paint a bright outlook for the copper The first revolution – the agricultural one Freeport-McMoRan market. – was based on grain and water. The We are optimistic about the near- and second and third revolutions – industrial long-term outlook for copper. In addition Brandon Koo, senior executive vice and transportation – required iron ore and to supply-side constraints, the fundamentals president, head of business group, oil to advance mankind. The fourth one, are underpinned by copper’s important role LS-Nikko currently underway – the technology in the global economy, including favorable The copper smelting industry is facing revolution – will require its own trends in urbanization, copper intensity in challenges from the increasing uncertainty commodities. As technology advances and renewable energy, and low-carbon scaled networks prevail globally, energy electrification. As a leading copper and communication infrastructure will producer, we remain focused on providing become central to new economic and this essential metal in a safe, cost-efficient political realities. The servers and switches and environmentally responsible manner. that underpin and connect the worldwide web would not exist without mining to David Lilley, chief investment officer, provide a key input – copper. Get ready! Drakewood Capital Management From 2022 on, it’s going to be a wild ride Over half the world’s population is living in on the supply side. middle-class households or above, and forecast to grow to 5.5 billion by 2030. The Paul Akroyd, CEO, IXM aspiration of this middle class is to be Disruptions to blister and cathode connected, clean consumers. All parts of production and more restrictive Chinese these ambitions are copper intensive. scrap import regulations have tightened Power infrastructures need to transform to the cathode market over the last twelve deal with green generation; its diffusion months. The Chinese government has and variability. Vehicles, products and reacted to the slowdown of the economy machinery trend to clean electric power through measures that should stimulate from internal combustion. Data metals consumption growth. Going proliferates exponentially and the cloud forward, accumulating concentrate deficits needs protection and power. At the same due to increases in Chinese smelting time there have never been greater capacity and an inadequate mine project political, social and environmental pipeline will constrain the raw material challenges to building new mine supply. supply for cathode production. Copper

Something’s gotta give! TINTO RIO prices will need to provide an incentive

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for miners to approve the projects required to meet future demand, which suggests limited downside risk given the recent rise in cost inflation. Ruben Fernandes, CEO, Base Metals, Anglo American Copper is one of the most essential metals in our modern lives. Its role in enabling an ever more clean, green and connected

world is expected to further increase an SHUTTERSTOCK already growing forward demand curve. Even at modest projections, the world will through miniaturization. Copper is also demand is 30 million tonnes and might be need the equivalent of 22 new Collahuasi- contributing to the environmentally 40 million tonnes by 2028. Copper comes size mines in the next 12 years. As we all friendly future and growth is phenomenal, from mines (20.7 million tpy) and the know, sufficient new supply is unlikely. particularly in antimicrobial, drinking circular economy (8.9 million tpy). Copper That is unless we find new ways to more water applications and sustainable from the circular economy is influenced by efficiently mine, process and extract the aquaculture wire-mesh applications. three factors. First is the copper price. precious metal, using a fraction of the Secondly, while 14 million tpy of water and energy, more precisely targeting Xie Shicai, chairman, secondary material is generated, only 8.9 the metal and leaving the waste rock Powerway Group Co., Ltd. million tpy is recovered; 5.1 million tpy behind. This is Anglo American’s From H2-2018 to Q1-2019, China’s might be ‘lost’. Improved recovery should FutureSmart Mining approach that we copper semis production was slow overall, see this ‘lost’ material entering the supply believe holds the answer to a sustainable mainly due to a slowdown in the end-use chain. Thirdly, copper has a useful life of 20 future for mining and our planet. markets. Trade friction between China and years. China became a major copper the USA had an adverse effect on exports, consumer in the 2000s, which means by Mark Loveitt, president, as did the weaker economic situation in the 2020s China’s copper will start to be International Wrought Copper Europe and the USA. After the Spring recycled. There is more than enough Council (IWCC) Festival, the semis-fabricating industry copper to guarantee supply, so that copper Copper has a bright future. Well – I hear began to strengthen. China’s macro- can contribute to a more sustainable, you say – he would say that, wouldn’t he? economic performance is improving. The transparent, healthier, and greener world. But, yes, it’s true. Copper is at the government has increased support for the forefront of new technologies: sustainable manufacturing industry, reduced taxes, Osamu Inoue, president & COO, energy, electric vehicles, autonomous expanded domestic demand and lowered Sumitomo Electric Industries, Ltd vehicles, artificial intelligence, and the the VAT rate. The government will Copper is an excellent conductor of required infrastructure for all of these actively promote and develop the electricity and as such is essential for the applications. The list isn’t endless, but not transportation industry, new-energy manufacture of wires and cables for a wide only are these applications driving demand vehicles plus the industrialization of variety of applications. Looking to the for copper over and above traditional information technology, and accelerate the future, there will be growing demand for applications, they also help reduce overall roll-out of the 5G network. All of these are electricity to power our cities. And that carbon emissions. And copper’s expected to have positive effects on the energy will be required to be generated and recyclability means that what we use today copper industry. distributed in an ever more will be available for reuse in decades to environmentally friendly way. Sumitomo come. So yes, it’s true: copper has a Oriol Guixà, CEO & president, La Electric Industries has 120 years of bright future! Farga experience in manufacturing and Copper demand in the 1980s was 10 developing various types of electric wires Yasunobu Suzuki, director & senior million tonnes a year. Today, annual and cables. Therefore, SEI’s advanced managing executive officer, technologies enables us to continue to president, Advanced Products meet future social requirements. Company, Mitsubishi Materials Corporation Don Lindsay, president & CEO, We are experiencing a game-challenging Teck Resources Limited revolution at a phenomenal speed as the We remain very positive on the long-term world has never seen before, especially in outlook for copper. The global trends of electrification, electric control and decarbonisation and increasing autonomous driving of vehicles, AI, IoT, electrification will drive strong demand 5G and sustainable energy generation. for copper well into the future. This bodes There is an ever-increasing demand for well for Teck as we look to double or even lighter and leading-edge performance triple our copper production with copper alloys. The total volume increase is Quebrada Blanca Phase 2 and potential

more than offsetting unit weight reduction SHUTTERSTOCK future expansions.

June 2019 | Metal Market Magazine | 53 TOGETHER, WE’RE BUILDING A BETTER TEAM.

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Awards for Steel Excellence

2019 FINALIST STEEL PRODUCER OF THE YEAR

www.nucor.com Top steelmakers in 2018 Top steelmakers 2019 edition Wayne, Indiana-based SDI International trade protection measures have announced plans to invest continued to loom large over global steel markets $1.7-1.8-billion in the construction of a three-million- over the past year – to the benefit of some ton-per-year greenfield, “organic” flat-rolled mill capable producers and the detriment of others. Alongside of producing latest-generation Fastmarkets’ annual ranking of steelmakers by advanced high-strength (AHSS) steels. output, our correspondents around the world Equally, if not more bullish, Nucor announced plans only days review developments in their regional steel sectors after the Section 232 tariffs were signed into law to build a $240-million rebar micro-mill in NORTH AMERICA year’s compilation of Top Frostproof, Florida. Estimated Steelmakers, and the five other annual capacity is 350,000 tons It took time and a substantial toll North American steelmakers with construction expected to on players up, down and across cited, 2018 was an exceptionally take two years pending permit the worldwide steel supply chain. good year. and regulatory permitting. For almost a year, the uncertainty, All five American mills in the Six months later, in early anticipation and speculation list – Nucor Corp., United States September, Nucor’s board of accompanying the possibility of a Steel, Steel Dynamics, Inc. (SDI), directors approved a $650 million sweeping US trade action AK Steel and Commercial Metals investment to expand production impacted the international steel Co. (CMC) – not only charted at Nucor Steel Gallatin’s arena. improved financial results but, flat-rolled sheet mill in Ghent, But the global guessing game emboldened by the Section 232 Kentucky. Capacity there will came to an end on March 3, 2018, action, announced a series of climb from 1.6 million tons to when President Donald Trump facility restarts, revamps, approximately 3.0 million tons signed a proclamation imposing upgrades, acquisitions and stock annually. tariffs of 25% on steel imported buybacks – not to mention the And earlier this year, North into the United States. And, with construction of at least two America’s top-ranked steel the sweep of a pen, that set the billion-dollar-plus, producer pulled out all the stops stage for an unprecedented new-generation greenfield mills. and disclosed plans to build a rebound in the fortunes of North Last year SDI completed the $1.35-billion, state-of-the-art America’s top steelmakers. acquisition of “substantially all” steel plate mill in Brandenburg, “The best way to sum up 2018 the assets of Kentucky Electric Kentucky. The facility will be is this – it was a record year for Steel, Ashland, Kentucky, 75% of capable of producing 1.2-million Nucor,” John Ferriola, chairman, United Steel Supply LLC, an tons of steel plate annually. CEO and president of the Austin, Texas-based distributor of Meanwhile, CMC spent much Charlotte, North Carolina-based painted Galvalume® flat-rolled of 2018 laying the groundwork to steelmaker said in a statement steel, and Companhia Siderugica integrate 33 rebar fabrication accompanying the release of the Nacional LLC’s Heartland Steel facilities and four steel mills (with company’s 2018 financial results. Processing LLC unit, which a combined annual mill rolling “We posted record earnings per produces various higher-margin, capacity of 2.5-million tons) into share and record revenues. And flat-rolled steels through further its Irving, Texas-based family. we shipped a record amount of processing. CMC acquired the assets from steel,” he added. In late November and in a Gerdau S.A. for a cash price of For Nucor, the highest ranked display of confidence in the future $600-million. CMC also US steel producer listed in this of American steelmaking, Fort completed the construction

June 2019 | Metal Market Magazine | 55 Top steelmakers in 2018

Ranking Company Country of origin/ 2017 2018 Ranking Company Country of origin/ 2017 2018 2018 2017 Main domicile Output Output 2018 2017 Main domicile Output Output

1 93,100 92,500 38 41 Anyang Iron & Steel Group China 10,057 10,972 ArcelorMittal SA Co Ltd (AISCO) 1 Luxembourg 39 37 TISCO - Taiyuan Iron & Steel China 10,503 10,704 2 2 Baowu Iron & Steel China 65,390 67,429 (Group) Co Ltd 3 3 Nippon Steel Corp (i) Japan 46,820 47,840 40 32 Jinxi Iron & Steel Group Co Ltd China 11,719 10,331 4 4 Hesteel Group Co Ltd China 3 44,06 44,894 41 42 Nanjing Iron & Steel United China 9,849 10,050 Co Ltd (NISCO) 5 5 POSCO Korea (South) 0 42,20 42,900 42 45 Steel Dynamics Inc United States 9,067 9,900 6 6 Jiangsu Shagang Group Co Ltd China 38,347 40,660 43 43 Panzhihua Iron & Steel Group China 9,242 9,523 7 7 Anshan Iron & Steel (Group) Corp China 34,220 37,359 44 46 Xinyu Iron & Steel Co Ltd China 8,902 9,364 8 8 JFE Steel (ii) Japan 33,095 32,310 45 52 Tsingshan Holding Group China 7,480 9,290 9 10 Tata Steel Ltd India 25,390 29,190 46 44 Erdemir Turkey 9,203 9,145 10 14 Jianlong Group China 20,260 27,885 47 53 Esfahan's Mobarakeh Steel Co (vi) Iran 8,659 9,020 11 9 Shougang Group China 27,629 27,342 48 39 Zenith Steel Group China 10,360 8,700 12 11 Shandong Iron & Steel Group China 21,679 23,209 49 50 SSAB AB Sweden 7,995 8,028 13 15 Valin Group China 20,146 23,012 50 55 Tianjin Steel China 7,125 7,7 70 14 12 Nucor Corp (iii) United States 21,478 22,456 - 51 New Tangshan Donghai Iron China 7,427 7,609 15 13 Hyundai Steel Co Korea (South) 21,010 21,481 & Steel Group Co Ltd 52 51 Metinvest Holding LLC Ukraine 7,630 7,323 16 16 Maanshan Iron & Steel Co Ltd China 19,714 19,642 53 60 Kunming Steel China 6,364 7,272 17 17 Novolipetsk Steel (NLMK) Russia 16,850 17,285 54 56 Celsa Group Spain 7,021 7,098 18 20 JSW - Jindal South West Steel Ltd India 16,060 16,690 55 58 Salzgitter AG Germany 6,955 7,039 19 18 SAIL - Steel Authority of India Ltd India 16,420 16,300 56 66 Jiuquan Iron & Steel (Group) China 5,175 7,018 20 21 Benxi Iron & Steel (Group) China 15,769 15,897 Co Ltd (JISCO) Special Steel Co Ltd 57 59 Riva Forni Elettrici Italy 6,930 6,977 21 22 Fangda Group China 15,111 15,512 58 65 Jindal Steel & Power Ltd India 5,690 6,960 22 25 United States Steel Corp United States 14,434 15,346 59 49 voestalpine Group Austria 8,150 6,940 (US Steel Corp) 60 53 Kobe Steel Ltd Japan 7,460 6,875 23 19 Gerdau SA Brazil 16,120 15,340 61 82 Chongqing Iron & Steel China 4,114 6,382 24 26 Baotou Iron and Steel China 14,200 15,245 (Group) Co Ltd (Group) Co Ltd 62 61 Minmetals Yingkou Medium China 6,088 6,362 25 24 China Steel Corp (iv) Taiwan 14,660 15,180 Plate Co Ltd 26 23 Rizhao Steel Group China 14,982 14,951 63 62 Jiangsu Binxin Special Steel China 5,981 5,985 Material Co Ltd 27 31 Liuzhou Iron & Steel Co China 12,299 13,529 64 64 BlueScope Steel Ltd Australia 5,864 5,971 28 27 Evraz plc Russia 14,033 13,019 65 63 Tangshan Ruifeng Steel China 5,969 5,735 29 34 Techint Group Luxembourg 11,597 12,951 (Ternium SA) (v) 66 69 Lingyuan Iron & Steel China 5,052 5,530 (Group) Co Ltd 30 30 Magnitogorsk Iron Russia 0 12,86 12,664 & Steel Works - MMK 67 74 Rashtriya Ispat Nigam Ltd, India 4,731 5,520 Visakhapatnam Steel Plant 31 29 ThyssenKrupp AG Germany 13,216 12,580 (Vizag Steel) 32 47 CITIC Pacific China 8,771 12,551 68 100 Tangshan Ganglu Iron China 3,066 5,389 & Steel Co Ltd 33 33 Severstal Russia 11,651 12,000 69 67 AK Steel Corp (vii) United States 5,077 5,156 34 36 Fujian Sansteel (Group) Co Ltd China 11,194 11,682 70 72 Saudi Iron Steel Co (Hadeed) Saudi Arabia 4,770 5,124 35 40 Shaanxi Iron & Steel (Group) Co Ltd China 10,238 11,381 71 73 Metalloinvest Holding Co Russia 4,758 5,100 72 75 Quzhou Yuanli Metal Co Ltd China 4,665 4,915 36 35 Pingxiang Iron & Steel Co Ltd China 5 11,46 11,309 73 77 Ezz Steel Co Egypt 4,515 4,882 37 38 Hebei Jingye Group China 10,406 11,245 74 57 Tangshan Guofeng Iron & Steel China 6,958 4,864

56 | Metal Market Magazine | June 2019 Ranking Company Country of origin/ 2017 2018 Ranking Company Country of origin/ 2017 2018 2018 2017 Main domicile Output Output 2018 2017 Main domicile Output Output 75 78 Wu'an Yuhua Steel China 4,497 4,797 110 116 Tokyo Steel Manufacturing Co Ltd Japan 2,580 2,860 -6 7 New Ningbo Iron & Steel Co Ltd China 4,573 4,553 111 108 Saarstahl AG Germany 2,785 2,782 77 70 Tianjin Metallurgical Group China 4,854 4,547 - 112 New British Steel Ltd (xii) United Kingdom 2,700 2,700 78 79 Ahmsa - Altos Hornos de Mexico 4,390 4,523 -3 11 New Tianjin Tiantie Metallurgical China 7 2,86 2,628 Mexico SA de CV Group 79 84 Zaporizhstal Integrated Ukraine 3,926 4,106 114 112 Weifang Special Steel China 2,678 2,612 Iron & Steel Works JSC Group Co Ltd 80 87 Commercial Metals Co (viii) United States 3,690 4,050 115 119 Colakoglu Metalurji AS Turkey 0 2,50 2,600 81 89 Hebei Tianzhu Iron & Steel China 3,505 4,027 116 114 Qatar Steel Co Qatar 2,645 2,575 (Group) Co Ltd 117 120 Feralpi Group Italy 2,448 2,504 82 68 CSN - Companhia Siderurgica Brazil 5,062 4,000 118 123 Belorussian Steel Works (BMZ) Belarus 5 2,34 2,474 Nacional -9 11 New Shanxi Xintai Iron & Steel Co Ltd China 2,151 2,447 83 111 Yunnan Yuxi Steel China 2,693 3,992 120 118 Acerinox SA Spain 2,519 2,440 84 109 OAO TMK (ix) Russia 3,784 3,989 121 120 Outokumpu Oyj (xiii) Finland 2,448 2,428 85 76 Xinxing Ductile Iron Pipes Co China 4,577 3,888 122 126 Vallourec (xiv) France 2,256 2,364 86 80 Mechel PAO (Mechel) Russia 4,274 3,881 123 113 Tangshan Donghua Steel China 2,673 2,342 87 85 Henan Jiyuan Iron & Steel China 3,823 3,851 Enterprise Group Group Co Ltd - 124 New Dongbei Special Steel Group China 1,608 2,338 88 88 Khouzestan Steel Co (KSC) Iran 3,676 3,820 Co Ltd 89 86 Dongkuk Steel Mill Co Ltd Korea (South) 3,727 3,767 125 117 AG der Dillinger Huttenwerke Germany 2,521 2,334 90 92 Shandong Shiheng Special China 3,410 3,745 126 125 ESCO - Esfahan Steel Co Iran 2,300 2,263 Steel Group Co Ltd 127 103 Hebei Wenfeng Iron and Steel China 2,973 2,228 91 104 Icdas Celik Enerji Tersane ve Turkey 3,700 3,700 Co Ltd Ulasim San AS (x) 127 127 Tangshan Wenfengshanchuan China 2,253 2,228 92 90 Tianjin Rockcheck Steel Group China 3,475 3,686 Wheel Co Ltd Co Ltd 129 99 Industrias CH SA de CV (xv) Mexico 2,091 2,128 93 93 Shandong Taishan Iron China 3,334 3,601 & Steel Co Ltd 130 128 Badische Stahlwerke GmbH Germany 2,240 2,126 - 94 New Fujian Sanbao Special Steel Co Ltd China 3,299 3,534 All figures in thousand tonnes - 95 New Liberty House Group UK - 3,500 (i) In last year's ranking Nippon Steel Corp was listed as Nippon Steel & Sumitomo Metal Corp 96 91 Nippon Steel Nisshin Co Ltd (xi) Japan 3,440 3,360 (ii) JFE's figure includes subsidiary company outputs calculated by percentage (iii) Nucor's figure is converted from reported figures in US tons to metric tonnes 97 96 Acciaieria Arvedi SpA Italy 3,188 3,352 (iv) China Steel Corp's ranking last year was based on 2016 production figures as 2017 was not 98 98 Lengshuijiang Iron China 3,081 3,274 availablet a the time of going to press. This year's ranking shows updated figures for 2017 & Steel Group Co and8 201 but represent sales tonnages rather than output 99 115 Delong Holdings Ltd China 2,595 3,180 (v) Ternium's figures are shipped steel (vi) Mobarakeh's ranking last year was based on 2016 production figures as 2017 was not 100 107 Shanxi Zhongyang Iron China 2,792 3,127 availablet a the time of going to press. This year's ranking shows an updated figure for 2017 and Steel Co Ltd production. 101 97 Emirates Steel United Arab Emirates 3,149 3,100 (vii) AK Steel Corp's figure represents volume of shipments rather than crude steel production Industries PJSC - converted from reported figures in US tons to metric tonnes (viii) Commercial Metals Co's figure converted from reported figures in US tons to metric tonnes 102 94 Yancheng Lianxin Iron & Steel China 3,228 3,094 (ix) OAO TMK's ranking last year was based on 2016 production figures as 2017 was not available Co Ltd at f the time o going to press. This year's ranking shows updated figures for 2017 and 2018 103 101 Usiminas - Usinas Siderurgicas Brazil 3,013 3,087 but represent sales tonnages rather than production de Minas Gerais SA (x) Icdas production figure for 2017 has been repeated as 2018 not avalible at time of going 104 102 Changshu Longteng Special China 3,009 3,002 to press Steel Co Ltd (xi) Nippon Steel Nisshin Co Ltd was listed as Nisshin Steel Co Ltd last year (xii) British steel Ltd 2018 production unavailable at time of going to press, so 2017 production 105 95 Diler Group Turkey 3,200 3,000 figures ha been repeated 106 106 Shanxi Jianbang Group China 2,810 2,987 (xiii) Outokumpu figure is for delivered tonnages rather than production 107 110 Dazhou Iron & Steel Co China 2,733 2,961 (xiv) Vallourec figures relate to tonnes sold (xv) Industrias CH SA de CV ranking last year was based on 2016 production figures as 2017 was 108 105 Trinecké Železárny as Czech Republic 2,885 2,923 not available at the time of going to press. This year's ranking shows updated figures for -9 10 New Xilin Iron & Steel Group China 2,402 2,891 2017 8 and 201 but represent sales tonnages rather than output Ranking movement: Up Down Unchanged – New entries this year

June 2019 | Metal Market Magazine | 57 Top steelmakers in 2018

slowed down after the strong increase a year before. That has forced higher exports, mainly from Russia. Steel consumption in the CIS reached 56.2 million tonnes in 2018, according to World Steel Association (Worldsteel) data. Steel usage increased by 3.5% year on year, while the rise between 2016 and 2017 was 6.5%. In 2019, the growth is expected to be lower – just 1.4%. In 2018, steel use in Russia went up to 41.2 million tonnes, an increase of 0.7% year-on-year. The expected increase in 2019 is 1%. Slower steel demand growth domestically, a weaker rouble and stronger prices in external markets led to a 4% increase of

BIG STEEL RIVER steel product exports from Russia. In 2018, they were 26.05 and commissioning of a second America’s second-largest It has been a busy million tonnes, according to the micro-mill in Durant, Oklahoma. steelmaker said it would invest year for US steel mills, International Steel Statistics “If you don’t have steel, you $1-billion plus to build a new many of which, like Bureau (ISSB). don’t have a country,” President sustainable endless casting and Big River Steel, are The growth was mainly related Trump told an audience of rolling facility at its Edgar expanding capacities to higher semi-finished steel hard-hats, politicians and local Thomson plant in Braddock, and capabilities products shipments, which were and state officials and Pennsylvania, and a cogeneration 13.35 million tonnes in 2018, representatives gathered at US facility at its Clairton cokemaking compared with 12.44 million Steel’s Granite City Works in late plant in Clairton, Pennsylvania. tonnes in 2017, according to July to mark the restart of the By virtually any measure and ISSB. mill’s ‘A’ and ‘B’ blast furnaces after decades of costly trade Novolipetsk Steel exported and the recall of some 800 litigation, bankruptcies, 10.91 million tonnes from Russia workers. Both ironmakers were consolidation and a seemingly in 2018. That was an increase of idled in December 2015. futile search for a “fair playing 9.1% year-on-year. From this Plans to bring ‘B’ furnace back field,” 2018 marked a true turning tonnage, more than 7 million on line were announced on March point for North American mills. tonnes was slabs. About 2.78 7, 2018 and were spurred, US Pivoting on the million tonnes were shipped to Steel executives said, by the implementation of the Section third parties. The rest was sent to pending action announced by 232 tariffs, the real-world results NLMK’s foreign subsidiaries and President Trump on March 1, for US steelmakers are clear. In affiliates in the United States and 2018 as a result of the Section 232 recent months, capacity Europe. national security investigation. utilization, as measured by the NLMK’s billet sales to third Less than a month later, American Iron and Steel Institute, parties surged by 12% in 2018, to Pittsburgh-based US Steel increased to more than 80% – 770,000 tonnes, against 686,000 unveiled plans to invest a levels not seen in more than a tonnes in 2017. NLMK cut minimum of $750 million – as decade – and steel shipments domestic sales in Russia by 4% part of a $2-billion asset weighed-in 5% higher in 2018 year on year, to 5.8 million tonnes revitalization initiative – to than 2017. Finally, steel imports in 2018. modernize its flagship, Gary, plummeted 35% from the time Other major steelmakers in Indiana operation. the Section 232 steel tariffs took Russia cut, or remained relatively The upbeat momentum effect in April, 2018 through flat in, export sales. continued into the New Year. In February, 2019. Evraz shipped to external February 2019, US Steel Jo Isenberg-O’Loughlin customers 10.98 million tonnes of announced plans, which had been steel products in 2018, which was suspended in December 2015, to CIS a decline by 7.6% year-on-year. restart construction of an electric From this tonnage, 4.7 million arc furnace (EAF) at its Tubular In 2018, steel consumption tonnes was related to Operations in Fairfield, Alabama. growth in the Commonwealth of semi-finished product sales. And in early May, North Independent States (CIS) has Meanwhile Evraz has increased

58 | Metal Market Magazine | June 2019 local sales in Russia to 5.04 additional tonnages of slabs to million tonnes in 2018, from 4.34 re-rolling assets in our traditional million tonnes a year before. markets,” Metinvest’s chief Magnitogorsk Iron & Steel executive officer Yuriy Ryzhenkov Works (MMK) cut exports by said. 15% year-on-year, to 2.38 million In the longer term, two major tonnes in 2018, while shipments Russian steelmakers are planning to the local market increased by to increase steelmaking as well. 5.9%, to 9.03 million tonnes on NLMK is going to boost steel higher sales of high-value-added output above 14 million tonnes at products. its Russia Flat Steel division, from Severstal’s steel product sales 13.3 million tonnes in 2018. totaled 11.22 million tonnes in Severstal is planning to increase 2018, up by 2% year-on-year. steel production to 12.7 million Within this, exports remained tonnes, up from 12 million tonnes almost unchanged at 4.41 million in 2018. tonnes. Marina Shulga Export growth from Russia was partly related to sales from EUROPE Donetskstal (DMZ), Yenakiieve Iron & Steel Works (Yenakiieve Despite the implementation of Steel) and the Makiivka unit, and the EU’s safeguard import quota, Industrial Union of Donbass’s continued tough competition (ISD) Alchevsk Iron & Steel from imports and slow trading led Works – assets based in Eastern to a weakening in domestic EU Ukraine which now export steel prices over the second half of products and pig iron from 2018 and in the first half of 2019. Russian Black Sea ports. The European Commission Ukraine exported around (EC) imposed definitive safeguard 12.74 million tonnes of finished measures on 26 imported steel steel and semis in 2018, according products in February 2019, to ISSB data, slightly down from replacing the provisional

13.18 million tonnes in 2017. ARCELORMITTAL measures that have been in place Metinvest shipped around 12 since July 2018. million tonnes of semis and steel The steelmaking equipment at ArcelorMittal The amount of import volumes products including resales – that Tula Steel includes a 1.6-1.9 remains the world's per product permitted into the was an almost 15% increase million tpy basic oxygen furnace largest steelmaking EU will increase by 5% against year-on-year. and a 1.5 million tpy continuous company their respective 2015-2017 From this volume, about 4.1 casting machine. The other 40% import average volumes on July 1, million tonnes was shipped to the of products will be exported, when the new annual safeguard Ukrainian domestic market, mostly to other CIS countries, but quota comes into force, raising which was 1 million tonnes, or also to countries across Europe. concerns of imports gaining an 32% higher, than in 2017. Ukraine’s Metinvest plans to increased market share in the Domestic sales have increased as increase steel production as well. region, according to regional steel steel consumption continued to The company’s new 2.5 million association Eurofer. grow in Ukraine, reaching 5.7 tpy continuous casting machine European steelmakers are million tonnes, against 5.5 million (CCM), which started up last currently in discussions with the tonnes a year before, according to November at its Ilyich Iron and EC to request that the safeguards Metinvest. Steel Works in Mariupol, was be strengthened to protect operating at design capacity domestic steelmakers from Steel production during the first quarter of 2019. greater import competition, while In 2018, the steel output in the This will boost the company’s the EC began a review into the region was almost unchanged at steel output by 800,000 tonnes in current safeguard on May 17. 101 million tonnes, according to 2019, with all additional volumes While the EU’s apparent steel Worldsteel, with Russian and sold in slabs and HRC on export. consumption rose by 2.6% Ukrainian output at 71.68 million “Large slab suppliers, year-on-year to 163 million tonnes and 21.1 million tonnes, Novolipetsk Steel in particular, tonnes in 2018, according to respectively. have planned maintenance this Eurofer, steel imports into the Steel output in Russia may year. That is why we expect the region increased by 12.3% increase further on the start-up of shortage in our usual outlets – in year-on-year, meaning that a new mill – Tula Steel, a subsidiary European, Black Sea and European mills did not fully of Industrial Metallurgical Mediterranean markets. That is benefit from the rise in Holding (IMH) – in May. why we are planning to ship consumption.

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European producers’ effective competition in the LATIN AMERICA shipments to the domestic market European steel market, following picked up by only 0.6% year-on- its purchase of Ilva. The Brazilian steel industry year in 2018, with domestic Elsewhere, the proposed flat started 2019 with optimism after prices falling amid weak steel merger between Germany’s signs of recovery in the steel automotive demand and low ThyssenKrupp and the European market in 2018, when demand competing import prices – subsidiary of India’s Tata Steel increased after two weak years of particularly from Turkey. faced continued competition 2016 and 2017. But the The United States has given the concerns from the EC. expectation was not confirmed in EU and Japan a 180 day-window Following news of the potential the early months of 2019 and the to reduce imports of automobiles failure of the merger, sector is still waiting for an and certain automobile parts, ThyssenKrupp unveiled a new improvement to occur in the essentially delaying potential commercial strategy, involving a months to come. Section 232 tariffs on imports of plan to cut 6,000 jobs over the The Brazilian steel institute, these products, it said on May 17. next three years, including 2,000 Aço Brasil, expects steel The delay is a temporary reprieve jobs in its steel business. consumption in the country to for European flat steelmakers, However, the company remains rise by 4.60% this year, to 22.06 who have been hit by weaker open to EU steel consolidation million tonnes, after an increase automotive sector demand. opportunities, it said. of 7.30% in 2018, with 20.57 Fastmarkets’ weekly price Looking ahead to the second million tonnes. Despite the assessment for domestic half of 2019, growth in apparent positive figures for consumption hot-rolled coil (HRC) in northern steel consumption in the EU is last year, steel demand showed Europe was €480-490 per tonne forecast to contract by 0.4% in signs of weakness at the end of ex-works on May 15, down 2019, according to Eurofer, while 2018 and a full recovery was sharply year-on-year from ArcelorMittal is more bearish, expected for this year. €570-590 per tonne ex-works on expecting it to contract by up to The growth for 2019 is September 2018, its highest level 1% year-on-year in 2019. expected to be driven by a over the past year. UK and European steel market stronger domestic market, with a Fastmarkets’ weekly domestic participants have renewed calls higher level of domestic sales price assessment for rebar in for the European Union and the offsetting lower exports. But the Northern Europe also weakened United Kingdom to reach an signs of a market rebound are not over the past year, albeit more agreement and avoid continued clear yet and this year’s moderately. market uncertainty, after the UK expectation was revised ArcelorMittal retained its was granted a six-month downwards after performance in position as the world’s largest extension to delay Brexit until the first quarter was weaker than steelmaker in 2018. The October 31, and temporarily expected. Luxembourg-headquartered avert the prospect of the UK The Brazilian economy has producer reported an operating having to leave the EU without a underperformed and ongoing income of $1.63 billion for its deal. political issues after a change of European operations in 2018, UK long steel producer British government last year has created down sharply from $2.36 billion Steel has faced a number of uncertainty and led investments in 2017. Brexit-related difficulties in to a halt. “There are 4,500 On May 6, the company recent months. The company infrastructure works halted in the reacted to the situation of low received a UK government loan country, and everybody is waiting demand and rising imports by worth £120 million to cover its for approval to reforms [to the deciding to temporarily reduce 2018 annual bill from the EU for Brazilian pension system] to annualized European flat steel the company’s carbon emissions. resume investments,” Aço Brasil production by 3 million tonnes. Requests for further government executive president Marco Polo This includes slowing down the financial support were not 'UK and de Mello Lopes said late in April. planned production increase at forthcoming and the company European Gerdau, ranked 23rd in the Top ArcelorMittal Italia to 6 million entered into administration. steel market Steelmakers list, has recently said tonnes per year. ArcelorMittal While the overall EU market there is a chance of steel prices Italia includes Italian steel outlook does not appear so participants increasing in the second quarter, producer Ilva, which optimistic as ArcelorMittal,the have renewed amid lower competition from ArcelorMittal finally acquired in largest steelmaker did announce calls for the imported material. It saw its sales November 2018. higher offer prices for HRC across EU and the UK volumes to the Brazilian domestic International metals group Europe on May 10, following its market increase by 5.90% in the Liberty House acquired a number decision to reduce production. to reach an first quarter, compared with the of ArcelorMittal’s European flat This was followed by Italian agreement and previous quarter, to 939,000 steel operations in April 2019, re-roller Marcegaglia also raising avoid continued tonnes. following an EC requirement for offer prices for hollow sections, The results exceeded analysts’ ArcelorMittal to reduce its coil and plate products. market expectations. “We expect market share and preserve Viral Shah uncertainty' [Gerdau’s] margins to continue

June 2019 | Metal Market Magazine | 61 62 | Metal Market Magazine | June 2019 Top steelmakers in 2018

rebounding ahead, as steel President Trump’s MIDDLE EAST demand [in Brazil] picks up,” announcement. Unlike other analyst Leonardo Correa from countries, such as Brazil and Middle East crude steel BTG Pactual said in a report in South Korea, Mexican producers production increased by 12.6% in May. The company, which has will not be subject to a quota for 2018, with a total output of operations in Brazil and the US, is steel imports in order to avoid the 36.062 million tonnes, compared also benefiting from increased tariffs. with 32.020 million tonnes in 2017, prices and lower imports after Finished steel use in Mexico according to Worldsteel data. The duties imposed following the US was expected to grow by 1.60% in countries in the total include the Section 232 investigation. 2019, to 25.80 million tonnes, United Arab Emirates (UAE), Other Brazilian steel after having decreased by 3.90% Iran, Saudi Arabia and Qatar. producers, such as Companhia in 2018, to 25.40 million tonnes, Middle East steel production is Siderúrgica Nacional (CSN), are according to Worldsteel’s April largely focused on long steel planning price increases for the forecast. products, given that demand in months ahead, as currency moves According to the Latin the region primarily stems from and higher international steel American steel association, construction projects, and with prices have made imports less Alacero, Mexico used to export construction demand having attractive. around 2.50 million tonnes per decreased from its peak a few Gerdau and CSN have been year of steel products to the US years ago, the region is now purchasing semi-finished steel before Section 232 tariffs, and self-sufficient in long products. material from third-parties and such volumes were under threat The region still has to import are planning a revamp of blast when the duties were imposed in flat steel though because there is furnaces in mid-2019. June 2018. The country’s largest only one producer of hot-rolled Maintenance works are expected integrated steelmaker, Altos coil in the Middle East – Saudi to last until August or September, Hornos de México (Ahmsa), Arabia’s Hadeed Sabic. However, and the companies have said they reported in February that Section other producers are now looking expect no effect on sales. 232 tariffs cost the company at diversifying into flat steel After the maintenance is around $250 million in reduced products, particularly given the over, the companies’ blast exports to the United States. threat to margins from global furnaces are expected to see an Besides an improved outlook protectionism and increased increase in productivity. CSN is after the exemption of Section imports, with at least two studying building a new 232 measures, most Latin companies rumored to be galvanizing facility in Brazil, to be American governments have planning such investments. supplied with increased continued to take measures to Steel demand in the Middle productivity generated by the protect their steel industry from East is currently moderate because blast furnace maintenance. low-priced steel imports. The of a low number of big projects. The Mexican steel industry Mexican government renewed UAE-based Emirates Steel increased steel output by 0.90% in late in March a 15% safeguarding CEO Saeed Al-Romaithi said on 2018, to 20.10 million tonnes, duty against imports of several February 26, 2019 that Emirates according to figures from the steel goods. The safeguarding Steel is expecting a slowdown in World Steel Association. Last duty, which expired in January the Middle East construction year, producers benefited from 2019, was one of the main reasons sector that will persist throughout measures to protect the steel behind the positive performance 2019. He said that he expected industry from low-priced of the country’s steel sector last the slowdown in the regional imports. year. construction industry this year The country’s steel sector had a “Mexico has advanced a bit because of increases in iron ore stable outlook until mid-May, more than other countries in prices, a drop in sales prices, when US president Donald Latin America in trade defense market volatility, and protectionist Trump decided to exempt Mexico measures,” Máximo Vedoya, actions by some nations. and Canada from a 25% tariff over president of Alacero and He had made an earlier steel imports resulting from the Canacero, said in May. “To some ‘Most Latin prediction in October 2018 of a Section 232 investigation. While extent, all countries are taking decline in global steel demand of some volumes of exports of steel actions against low-priced American 1.4% in 2019, in his capacity as materials were being made to the imports, which come mainly from governments chairman of the economics US despite the tariff, market China, but such measures take have continued committee of the World Steel sentiment improved after the time to be applied,” he said. to take Association. announcement. In March, Colombia imposed In May 2018, Al-Romaithi, said “We believe this is a firm and an 8.50% additional safeguarding measures to that Gulf Cooperation Council very positive step to the industry duty to imports of rebar from protect their (GCC) countries were acutely in all regions and a huge countries with which it does not steel industry aware of trade issues and are keen improvement towards the signing have free trade agreements, for a to limit the impact of steel being of the USMCA,” Mexican steel period of two years. from low-priced redirected to countries outside association Canacero said after Felipe Peroni steel imports' the US.

June 2019 | Metal Market Magazine | 63 GERDAU IS COMMITTED TO THE FUTURE OF CLEAN STEEL TECHNOLOGIES

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“It’s a bit slow because the whole some low-quality imports still ‘Middle East 732,000 tonnes produced in the GCC is linked together [in terms of continue, according to Nouf steel production same period of 2018. anti-dumping legislation] but Bahamdan, coated flat steel something is definitely happening director of NCSI. is largely Iran – the region is lacking the rules focused on long Iran recorded the highest crude and regulations that we need to Investments steel products, steel output in the region, with 25 give us freedom to compete fairly Oman’s Jindal Shadeed, part of million tonnes of output, up by in the market,” he said. India’s Jindal Steel & Power given that 17.7% from 21.236 million tonnes “From our point of view, the (JSPL), has successfully demand in the in 2017. The country ranked as the demand outlook for rebar [for] commissioned a new billet caster region primarily tenth largest steel producing 2018-2019 looks stable – we have with a capacity of 2 million tonnes stems from nation in 2018, up from being 13th the 2020 Dubai Expo and related per year at its mill in Sohar in biggest in 2017. infrastructure construction northern Oman in April 2019. construction However, US President Donald currently going on in the UAE,” Al UAE-based United Iron & Steel projects' Trump announced his country’s Romaithi said. Co (UISC) started producing its withdrawal from the nuclear deal Abu Bucker Husain, CEO of own cold-rolled coil at its plant in on May 8, 2018 and the sanctions UAE-based Al Ghurair Iron and Abu Dhabi for processing into on Iran were reinstated in 2019, Steel (AGIS) believed 2017 had hot-dipped galvanized coil in with further sanctions on Iranian been the worst year for contracts March 2019. The new 250,000 metals – including steel, being awarded in the Middle East tonnes-per-year cold-rolled coil aluminium and copper. since 2012, but now that (CRC) facility consists of an in-line The country’s steel exports may investment in construction, push-pull pickling line, a single- decrease because sanctions on Iran infrastructure projects and the oil stand cold-rolling mill and a mean that payments cannot be and gas sector has returned, this continuous galvanizing line to made to Iranian banks in US could all change, he said at process both hot- and cold-rolled dollars or gold, therefore limiting Fastmarkets MB’s Middle East coil. the country’s international trade. Iron and Steel Conference in Dubai-based multinational Iran produced 6.223 million December 2018. Dana Group has completed the tonnes of crude steel in January- Participants and speakers at the construction of new mills for the March 2019, 7.1% more than the conference agreed that the Middle manufacture of CRC and 5.811 million tonnes compared East region needs more protective hot-dipped galvanized coil (HDG) year-on-year. measures because low-priced in the UAE in February 2019. steel, which cannot be exported to Installation and commissioning of Saudi Arabia and Qatar the US because of 25% Section the necessary machinery is under Saudi Arabia produced 5.240 232 duty, is being redirected to way. The company did not give a million tonnes of crude steel in Middle East due to the lack of date for the start of production, 2018, which was an 8.4% increase efficient protective trade but it expects to produce 250,000 compared with 4.831 million measures. tonnes per year of HDG and tonnes a year earlier, according to GCC countries, which are Aluzinc coils. It will also produce Worldsteel data. Bahrain, Kuwait, Oman, Qatar, 150,000 tpy of pre-painted Current demand for steel is Saudi Arabia and the UAE, did galvanized iron (PPGI), or stronger compared with late 2018, increase the import duty on rebar color-coated coil, at the unit in the and earlier 2019, and if it and wire rod to 10% from the Dubai Industrial Park, 35 km from continues to be strong, production previous 5% in effect from January the Jebel Ali sea port. may move higher, sources believe. 16, 2019. Bahraini rebar producer Unirol However, the country’s economy The region is currently increased its rebar production depends directly on oil prices, so self-sufficient for long products, capacity to 275,000 tonnes per any fall in oil price will have a and trade is mostly between the year from 175,000 tpy with the negative effect on steel market. GCC member countries for long launch of a new unit in March Saudi Arabia produced 1.412 million products. 2019. tonnes of crude steel in January- In addition, the Saudi National March 2019, 18.4% more than the Committee for Steel Industry UAE 1.193 million tonnes produced in (NCSI) was formed in 2018 in Crude steel production in the UAE the same period of 2018. order to avoid low-quality steel totaled 3.247 million tonnes in Qatar produced 2.575 million imports entering Saudi Arabia and 2018, down by 1.9% on an annual tonnes of crude steel in 2018, a fall the Middle East region, and to basis from 3.309 million tonnes in of 2.6% from 2.644 million tonnes support local production. The 2017. Production in the country is a year earlier. The country’s crude Saudi Arabian Standards, expected to improve because of steel production in the first three Metrology & Quality Organisation better demand for local products months of 2019 reached 632,000 (SASO) banned the trading of in 2019. tonnes, 1.2% more than the pre-painted galvanized coil The UAE produced 805,000 624,000 tonnes produced in products which do not comply tonnes of crude steel in January- January- March 2018. with its regulations. Nevertheless, March 2019, 10% more than the Serife Durmus

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121,331 tonnes of material from the country to be brought in over the first quota period, which will run until July this year. For rebar, the Turkish quota is 117,232 tonnes Tariffs trouble over the same period. As a result of these restrictions, some Turkish mills have reduced their capacity utilization, while others that can produce either slab or billet have focused on slab Turkish steel production due to stronger demand for flat steel in the export markets. As a major scrap-based steel-producing nation Even though current sentiment is more positive in the country after with multiple export markets, Turkey is bound to the reduction of US duties, be affected by international trade quotas and production is unlikely to improve in 2019 compared with 2018 in tariffs. The past year is a case in point, explain Turkey because of weak domestic demand and a slow market for long Serife Durmus and Cem Türken steel products. Turkey produced 37.3 million International trade barriers and a tonnes of crude steel in 2018, a volatile exchange rate for the 0.56% decrease compared with Turkish lira have had ramifications 2017, according to the Turkish Steel for both flat steel and long product Producers Association (TÇÜD). markets over the past year. Imports FLAT PRODUCTS Turkey increased the hot-rolled coil Demand for flat steel in Turkey’s (HRC) import duty to 6% for domestic market has been slow re-rollers, up from 3.5% previously, since August 2018, when the effective from January 1, 2019. country’s lira lost significant Additionally, the duty for ground against the dollar and the cold-rolled coil (CRC) imports, United States doubled the tariffs including for hot-dipped galvanized applied to steel entering the country coil (HDG), pre-painted galvanized

from Turkey. SHUTTERSTOCK coil (PPGI) and white goods was The lira was trading at TRY100 to changed to 7%, effective from $16.5811 on May 21. This the Istanbul poll, and scrapped that Rates of vehicle January 1, 2019. It was 7% for HDG compared with $17.25 on April 14, result on May 6. The Istanbul production have producers and 5% for PPGI $19.00 on March 14, $18.22 on election will now be re-run on declined in Turkey producers previously, while white November 14 last year, and $23.12 June 23. this year goods producers did not get a duty on May 14, 2018. discount until 2019. Turkey had US duties on Turkish steel were Production previously imposed a 10% import reduced back to 25% in May 2019, Slab production in Turkey was duty on CRC imports. so sentiment in the Turkish steel 4,346,000 tonnes in January-April Turkey terminated an market has improved a little. 2019, 7.65% more than the investigation into the effects of steel Political uncertainties have also 4,037,000 tonnes produced in the product imports on the country’s affected the Turkish steel sector in first 4 months of 2018. The domestic steelmaking industry, the 2019. Mayoral elections were held country’s total crude steel Official Gazette announced on on March 31, with some production reached 11,233,000 May 7. No additional duties or other unexpected results. The ruling tonnes in January-March 2019, a measures will be imposed after the Justice & Development Party (AKP) 10.5% decrease year-on-year. conclusion of the investigation. won the majority of votes for Flat steel production increased in The probe began in April 2018, mayors across the country, but lost Turkey, while long steel production and considered imports from all out in the key cities of Ankara, fell because of shrinking export origins of flat, long and stainless Istanbul, Adana and Antalya, where markets for long steel. The steel, along with steel tube & pipe the opposition Republican People’s European Commission (EC) products. Turkey’s ministry of trade Party (CHP) triumphed. imposed definitive safeguard duties announced in the Official Gazette After a dispute, members of the on imports of a range of steel that import volumes of the products country’s Supreme Election products on February 1, 2019. under investigation did not increase Council (YSK) accepted the The import safeguard quota for significantly during the period objection put forward by the AKP to wire rod from Turkey allows for under scrutiny, and that the

June 2019 | Metal Market Magazine | 67

Turkish steel

imports did not cause any harm to dumping margins on Turkish compared with 63,139 tonnes local production. steelmakers Çolakoglu Metalurji exported in the same period and Erdemir. of 2018. Exports Morocco asked the WTO Turkey exported 412,160 tonnes The quotas introduced by the Appellate Body to review its of coated coil in January-March European Commission (EC) did decision. Turkey exported 13,908 2019, 57% more than the 262,348 not have an effect on hot-rolled coil tonnes of hot-rolled flat steel tonnes exported in January-March because the EC did not announce classified under customs code 7208 2018. The country’s narrow flat

country-specific quotas for to Morocco in 2013, but exports of SHUTTERSTOCK steel exports reached 34,709 hot-rolled coil, but the quota for the product had fallen to 8,721 Some construction tonnes in the first three months of coated coils under HS codes 7210 tonnes in 2017. projects have 2019, just a 7% increase compared 70 80, 7212 40 80 is 21,834 tonnes stopped due to with 32,454 tonnes exported in until June 30. Automotive industry financial and political January-March 2018. And alloy flat Turkey exported 1,263,804 The automotive industry is one of uncertainties in steel exports were 53,617 tonnes in tonnes of coated coil under the biggest steel-consuming sectors Turkey the first quarter of 2019, not much customs code 7210 in 2018, with for Turkey’s steelmakers, but it has less than the 54,342 tonnes 711,543 tonnes going to EU been shrinking since 2018. exported in January-March 2018, member countries. So Turkey’s Turkey’s vehicle output totalled according to TÜIK. exports to Europe for colour- 1,550,150 units in 2018, down by coated coil are limited. However, 8.59% from 1,695,731 vehicles the Investments hot-dipped galvanized coil exports previous year, the Turkish New Turkish flat steel producer are strong to the region. Automotive Manufacturers Yildiz Iron & Steel started Turkey exported 1,713,822 Association (OSD) reported. production of CRC in early tonnes of flat steel in January- In January-March 2019, Turkey December 2018. The mill’s capacity March 2019. This volume was up produced 361,516 vehicles, is 1.5 million tonnes per year of CRC by 41.08% from the 1,214,777 14.98% fewer than the 425,195 at its facility in Kocaeli, close to tonnes exported in the same period vehicles produced in the first three Istanbul. Yildiz started production of 2018, according to the Turkish months of 2018, according to of HDG at the facility in July 2018. Statistical Institute (TÜIK). the OSD. Turkish trader and steel service The country’s export volumes In 2018, domestic vehicle sales center Galva Metal started are expected to increase after the were 641,541 units, down by 35% production of CRC at its facility in US decreased the import duty on from 986,829 vehicles in 2017. Kartepe, in the north-western Turkish steel to 25% from the The country imported 397,266 Turkish province of Kocaeli in previous 50% on May 17, 2019. vehicles in 2018, a decline of January 2019. The unit’s capacity is Turkey exports of hot-rolled coil 36.38% from 624,487 vehicles the 60,000 tonnes per year, in coils under HS code 7208 to the US in previous year, while exports fell by 850-2,000 mm wide and a gauge of January-March 2019 were very 1.04% to 1,318,869 units from 0.25-6.00 mm. small. In the same period, Turkey 1,332,794 units in the same Turkish steelmaker Erdemir’s exported 18,227 tonnes of rebar comparison, the OSD data show. second HDG line started under HS code 7214 to US shores, Some automotive producers in commercial production in April according to the TÜIK. Turkey have reduced production 2019. This line has capacity for This compares with Turkey- because of weak demand. 350,000 tpy and will increase origin shipments of HRC and rebar Erdemir’s total HDG capacity to to the US that totalled 233,304 Export volumes 650,000 tpy. It will produce tonnes and 181,115 tonnes Turkey’s flat steel exports had been 0.4-2.0 mm thick coil in widths of respectively in the first three increasing, especially since early 700-1,900 mm. Erdemir Group months of 2018, according to 2017, thanks to strong demand in will also build two new blast TÜIK. Turkish market participants Europe. Demand for Turkish flat furnaces, although full details have believe the reduction of the duty steel is strong in Europe. yet to be announced. will allow for the resumption of Turkey exported 1,713,822 shipments to the US and will help tonnes of flat steel in January- LONG PRODUCTS domestic steel production grow March 2019. This volume was up The Turkish long steel market in Turkey. by 41.1% from the 1,214,777 suffered heavily from weak Morocco imposed a permanent tonnes exported in January-March demand in the country’s export 11% anti-dumping duty on Turkish 2018, according to the TÜIK. and domestic markets in the past HRC in August 2014, which was Hot-rolled flat steel exports were year. Turkey’s long steel export challenged by Turkey in October 1,067,299 tonnes in the period, a markets were hit by the trade 2016. A World Trade Organization 33% increase year-on-year, barriers erected in the country’s panel made its ruling in late compared with 802,4945 tonnes principal outlet markets, while its October 2018, noting that the exported in January-March 2018. domestic market was badly affected Moroccan government had Cold-rolled flat steel exports were by the weakening lira due to violated the trade body’s 146,037 tonnes in the first quarter internal political and economic regulations when it established of 2019, a 131.29% increase problems.

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70 | Metal Market Magazine | June 2019 Turkish steel

The sentiment for long steel ‘Overall some supplier countries, such as billet output was 6.89 million tonnes exports out of Turkey was negative demand in Turkey, being allotted specific in January-April 2019, down until mid-May, with no recovery amounts. These have already been year-on-year from 8.51 million expected, but the halved import the country’s filled for long steel for the current tonnes, according to the TÇÜD. duties in the United States brought export markets quota period, and mostly filled for some glimmer of hope to the were sluggish flat steel. Domestic demand market. The US lowered its tariffs Dalbeler noted that Turkish flat In Turkey’s domestic long steel on steel imports from Turkey to until mid- and long steel exporters were now market, political and economic 25%, from the previous 50%, May, owing looking in Asia for new export problems and the weakening lira effective May 17. to doubled markets, because high prices for continued to put pressure on The move reversed a decision by Section 232 steel from China allow demand and prices. The US President Donald Trump in competition from Turkish steel. unexpected results from the August last year to impose higher tariffs in the US, But the Asian market will not mayoral elections held on March tariffs on US imports of Turkish safeguarding provide a long-term solution, in 31, 2019, and the decision to aluminium and steel amid an quotas in the way that the US and the EU re-run the Istanbul election on escalation in tensions between the have done in previous years, June 23, have more seriously two countries. Turkish market Europe and because of the volatility of prices in affected long steel product participants believe the reduction additional the region. markets than the flat steel markets of the duty will allow for the duties imposed Long steel exports into the EU because of the increased weakness resumption of shipments to the by Egypt' were also limited by that region’s of the country’s lira. US and will help domestic steel safeguarding quotas. The The decline in the exchange-rate production grow in Turkey. European Commission (EC) value of the Turkish lira hurts the Overall demand in the country’s imposed its definitive safeguard long steel market because the local export markets were sluggish until duties on February 1. currency is used for trading in such mid-May, owing to doubled The import quota for wire rod commodities domestically, while Section 232 tariffs in the US, from Turkey allowed for 121,331 the mills buy most of their raw safeguarding quotas in Europe and tonnes of material from the material needs in US dollars. additional duties imposed by country to be brought in over the The news of the re-run of Egypt. This affected steel first quota period, which will run Istanbul elections led to the lira production in the first four months until July this year. For rebar, the losing more ground against the of the year. Turkey produced 11.2 Turkish quota was 117,232 tonnes dollar, because of international million tonnes of crude steel in over the same period. Both quotas fears about the rule of democracy January-April 2019, a decrease of were filled almost immediately in Turkey. This added to the 10.50% year on year, according to from material that had been problems already affecting the lira. the Turkish Iron & Steel Producers shipped earlier. The currency originally began to Association (TÇÜD). It exported a The EU quotas for Turkey- lose value against the dollar as a combined total of 21.40 million origin rebar exports have been set consequence of a political dispute tonnes of steel products in the full at 301,537 tonnes for July 2019 to between Turkey and the US, after year of 2018 – a 20.80% increase June 2020, and 316,614 tonnes for Turkey detained a US citizen on year-on-year. July 2020 to June 2021. To put that suspicion of links to a proscribed The country is unlikely to match in context, in 2018 alone, Turkey’s political group. that export level in 2019 because rebar exports to the EU totalled “Market players were not of several challenges. Ugur 821,178 tonnes. expecting the [result of the] Dalbeler, chief executive officer of The US market has been mayoral election [in Istanbul] to be Turkish steelmaker Çolakoglu effectively closed to Turkish cancelled,” a source in the country Metalurji, who is also a member of exporters because the doubled said. “Most mills which sell the board of directors of TÇÜD, import tariffs that were applied finished goods for lira have closed said that domestic steel under that country’s Section 232 their sales, because they cannot consumption shrank by 39% year trade legislation since August 2018. predict where the lira is going.” on year in the first two months of Another barrier for Turkish “The domestic long steel market 2019. TÇÜD has reported that exporters was created when Egypt is suffering from weak demand. consumption fell to 3.4 million imposed additional import duties Nobody wants to buy rebar at such tonnes in January-February, of 25% for rebar imports, and high prices. All customers are against 5.6 million tonnes in the between 3% and 15% for billet keeping their bookings at the first two months of 2018. Exports, imports on April 15. Egypt had lowest possible volumes,” another meanwhile, increased by 18%. already imposed a permanent Turkish source said. But Dalbeler believes that anti-dumping duty on rebar from “Construction projects have exports will fail to increase through Turkey at 7.0-22.8% in 2017. already stopped due to financial the rest of 2019 because of the As a result of these and political uncertainties. The import quotas set by the EU, one developments in the export major cities changed hands at the of Turkey’s major export markets. markets, a number of Turkish long elections, so construction licenses The EU has set a range of quotas steel producers have reduced their might need to be renewed,” a third for steel product imports, with capacity utilization. Turkey’s steel Turkish source added.

June 2019 | Metal Market Magazine | 71 DIGITALIZATION INDUSTRIAL INTELLIGENCE

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June 2019 | Metal Market Magazine | 75 0000.pdf 1 2019-05-15 17:43:43

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DANIELI

Hot tests are proceeding for the innovative Danieli Universal ® Endless (DUE ) plant of Shougang Jingtang United Iron & Steel PRIMETALS Co. Ltd, in Caofeidian, China. It will provide coil-to-coil and endless, thermo-mechanical and multi-phase, ultra-thin and thick A newly introduced DynaJet® Flex spray cooling system from products in a single production line, making both value-added Primetals Technologies has been started up at Hyundai Steel’s niche products as well as commercial-grade products. 2.8 million tpy two-strand continuous slab casting machine CC2 Shougang Jingtang’s DUE® plant will produce 2.1 million tpy in Dangjin, South Korea. The technology allows for pulse width in a wide mix of steel grades and strip dimensions from 0.8 to 12.7 modulated cooling, thus enabling high discretization of cooling mm thickness and widths from 900 to 1,600 mm. In mid-April zones in the width direction (800-1,650 mm on slabs 250 mm the hot test of the caster area started as per schedule, and within a thick) and widening the operation window with higher turn few days several heats of LC and MC grades had been cast. Targets down ratios compared with cooling systems currently in use. were achieved, producing 110 mm thick, 1,420 mm wide slabs. This minimizes the appearance of corner cracks, especially for The mill has also started rolling tests. Danieli says that its DUE® advanced high-strength steels (AHSS). Scarfing losses and air layout configuration, together with effective and optimized consumption are consequently reduced. This is the first energy consumption, now represents the most extensive industrial application of DynaJet Flex technology, notes application of Danieli’s concept of production flexibility. Primetals Technologies.

Customer Supplier Order details Start-up Portugal Megasa group SMS group New walking beam furnace (160 tph cold charged; 210 tph hot charged) for 120-160 mm billets up to End summer 2020 14.5 meters long for existing bar mill SN Seixal Danieli Rolling mill modernization, including new K-welder for EWR and intermediate and finishing stands for wirerod Summer 2020 and spooled bar in coil production Russia Abinsk Electric Steel Works Danieli 600,000 tpy H3 wirerod line (5.5 to 16 mm dia smooth rounds; 6 to 12 mm dia quenched and microalloyed rebar) – Evraz NTMK Primetals Technologies Automation and electrical equipment for BF No.6 reconstruction Mid-2020 MMK SMS group Product Quality Analyzer (PQA®) system for on-line analysis of process, production and quality data – MMK Paul Wurth BF No. 2 cooling system modernisation 2020 MMK-Metiz Tenova LOI Expansion of HPH® bell-type furnace plant for wire coils Early 2020 Thermprocess Novorossiysk Rolling Plant Danieli 500,000 tpy H3 wirerod mill (to roll 150x150 mm billet into 5.5 to 16 mm dia wire rod and deformed wirerod in coils – weighing up to 2.1 tons) NTMK Paul Wurth Technical upgrade of BF No.6 to increase capacity to 2.5 million tpy October 2020 OMK Danieli New seamless pipe complex for 500,000 tpy of OCTG (casing and tubing), linepipe and industrial pipe from 2021 2.875 to 10.75 inches, using FQT technology Serbia HBIS Serbia Iron & Steel Primetals Technologies BOF converter No.2 replacement with tapping weight of 105 tonnes, including a Vaicon Link 2.0 suspension system Q2 2020 and new tilting drive Spain Sidenor Basauri SMS group Stage 2 upgrade of walking beam furnace to increase capacity from 85 tph to 130 tph of specia steel blooms H2 2020 185-240 mm square

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Jiangsu Yonggang Group Co., Ltd., in Jiangsu Province, China, has granted SMS group company SMS Concast the final acceptance certificate for the modernization of a new four-strand SBQ billet caster, replacing an old caster at Yonggang in Zhangjiagang, China. Jiangsu Yonggang´s SBQ steel grades portfolio now includes high-quality bearing and other engineering steel grades. The new billet caster, with a capacity of 540,000 tpy, produces square billets from 150 to 220 mm. It was redesigned for the flying tundish production concept, a method to increase the operation time and yield of the caster. The tundishes were equipped with the Conflow stopper control to assure a precise and stable steel flow for reliable casting requiring minimal maintenance. In addition to the standard mold electromagnetic stirrer Constir-MEMS, a final stirrer Constir-FEMS helps achieve the required product quality in terms of center segregation and center porosity. The spray cooling system is equipped with SMS Concast’s Airmist spray nozzles, enabling a uniform and softer cooling at lower water consumption. Provision has been made for the future application of Dynamic Mechanical Soft Reduction (DMSR) for bigger sections. A further technology is heat tracking as part of the level-2 system. This module allows the quality of each heat to be meticulously traced down to single billet slices and thus enables the operator to predict quality events and SMS GROUP improve the production yield by cut optimization.

Customer Supplier Order details Start-up Turkey Diler Demir Celik Danieli Vacuum degassing station with Q-AFS technology providing automatic control of slag foaming – Oyak Mining & Metallurgy Danieli Inspection and conditioning plant to process 300,000 tpy (min.) slabs in ultra-low, low- and medium-carbon – (Erdemir) and alloy steel grades Erdemir Paul Wurth New BF2 at Eregli to produce 5,000 tpd of hot metal. New BF1 at Isdemir to produce 7,900 tpd March 2021 (Erdemir); May 2021 (Isdemir) USA American SpiralWeld Pipe Co SMS group New online spiral pipe mill in Paris, Texas, to produce pipes over 16 meters long, OD of 610-3,658 mm and 2020 max wall thickness of 25.4 mm in material grades up to X-70 Big River Steel SMS group Expansion to 3 million tpy of steel production with two EAFs and two twin-ladle furnaces, plus a second strand, – tunnel furnace and another downcoiler for CSP® plant California Steel Industries Primetals Technologies Upgrade of main drives and motors on 86 inch HSM; upgrade of CGL line drives and automation system Mid-2020; mid-2022 JSW Steel Danieli Replacement of primary descaler, hot plate leveler and plate shearing line No. 1 at Baytown, Texas, to improve Fall 2019 plant yield Nucor Danieli Two new water-treatment plants for MI.DA. minimill projects for Nucor Sedalia (Missouri) and Late-2019 (Sedalia); Nucor Frostproof (Florida) Early-2020 (Frostproof) Nucor Tuscaloosa Primetals Technologies Plate mill upgrade,including new power coiler downcoiler to produce heavier line pipe gauges for energy industry Q1 2020 Nucor-Yamato SMS group Upgrade of heavy section mill (Mill 2) for wide flange and H-pile sections in Blytheville, Arkansas. Replacement H2 2020 of UR-E and UF stands by tandem-reversing mill type CCS 1500 U.S. Steel Primetals Technologies New 2.5 million tonne per year Arvedi ESP endless-casting rolling plant for high-quality, ultra-thin (0.08-6 mm) – strip with max..strip width of 1,956 mm (77 inches) to include AHSS grades Zekelman Industries SMS group New 400,000 tpy, 28 inch ERW tube welding line for Atlas Tube structural tube division (10.75-28 inch dia up to – 1 inch thick; plus square and rectangular hollow sections from 8 x 8 inch to 22 x 22 inch; or 34 x 10 inch)

June 2019 | Metal Market Magazine | 79 SOLUTIONS • INNOVATION • EXPERTISE

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jet dryer is installed, in addition to the equipment used to seal the exit strip gap of a rolling stand. This effectively removes any droplets from the strip The latest cold surface thanks to a 20% larger shearing effect than standard solutions. The heavy-duty exit flying shear that, together with the carousel reel, ensures flying gauge change and an mill technology endless rolling process can cut all material grades and sizes at a speed of up to 300 meters per minute, The new cold mill complex built for Yıldız Demir minimizing mill slowdowns that Çelik in Turkey is a case study in state-of-the-art could cause poorer strip quality in terms of shape, thickness and surface. technology, supplied by Danieli The commercial production of the tandem mill started within 22 Favorable market conditions in advanced turbulent channel concept months from order placement, and Turkey led Yıldız Entegre Holding to achieves the highest energy savings the throughput capacity hit more enter the cold strip processing sector, and pickling condition flexibility than 50% of nominal quality within adding to its long experience in regardless of the strip grade and 30 days, Danieli reports. forestry products, fertilizers, speed, according to Danieli. chemistry, port operations, energy The plantmaker adds that the Optimized shaped rolls

generation and insurance sectors. tandem mill section includes five DANIELI The tandem mill is designed to cover It decided in 2015 to enter the six-high mill stands with 25,000 kN Danieli Automation the whole potential product mix for steel business through its subsidiary separating force to produce supplied all of the automotive markets, from ultra-soft company Yıldız Demir Çelik, high-strength quality grades with electrical and control material (IF, ULC steel) to ultra-hard selecting Danieli as technology superior flatness correction systems material (DP1000-DP1200). partner and supplier of its first steel capabilities through advanced Consequently, mainly to maintain processing plant: a new, complete mechanical equipment and new, a wide area for shape control while cold-mill complex to transform black accurate and sophisticated models. operating the mill at highest rolling coils purchased from the market into Operational flexibility is ensured force the mill stand can use, added-value cold-rolled, tempered by the installation of positive/ optimized shaped rolls (OSR) have and coated coils. negative work-roll and intermediate- been selected to obtain an equivalent The cold-mill complex is in roll bending and intermediate-roll crown in relation to the shifting Kocaeli, an industrial area in northern shifting system on each stand, with stroke of the intermediate roll. Turkey. The installation comprises a the possibility of using tapered or The OSR has a special roll barrel pickling line coupled to a six-high shaped rolls. contour. The OSR for the Yıldız mill tandem cold mill, a galvanizing line, a Additionally, final strip shape is can be applied to the IR roll, keeping temper mill and annealing line. It controlled by an in-line shapemeter, the taper zone in place, thus started operating in sequence at the providing feedback on bending, minimizing the disturbance to the beginning of 2018 and now is tilting and selective cooling headers roll shop and at the same time producing in excess of the on mill stand No5. allowing the intermediate roll to be contractual rate, up to 1.5 million tpy. Ultra-low hysteresis hydraulic utilized with straight or with shaped automatic gauge control (HAGC) roll contour. Advanced technologies with a 45% faster response time Danieli notes that one of the strong ensures precise control of strip Flexible HDG points of the continuous pickling line thickness. The 400,000 tpy line will process LC, coupled with five-stand, six-high As a result, strip thickness MC, and HSS grades. Strip thickness tandem mill is the entry area, tolerance will decrease down to will range from 0.2 to 3.0 mm and designed for high reliability and with ± 0.6%, head/tail off-gauge length width from 700 to 1,300 mm, an “any-coil-feed” concept to avoid will be lower than four meters, and respectively. production losses due to coil strip flatness will be less than 6IU. The line will run at speeds of up to preparation and joining. A new system has been developed 200 meters per min, processing The pickling section is based on by Danieli to accurately control incoming coils of over 30 tonnes.The Danieli patented Turboflo® roll-bite lubrication, thus changing its finishing section has the flexibility to technology. It is preceded by a effect if and when required to produce coils down to a minimum powerful scale breaker, operated at stabilize the friction coefficient of the size of 5 tonnes, suitable for steel up to 500 kN of tension, to improve roll bite in any mill conditions. service centres. the shape of incoming strip and to To ensure high product quality and Its vertical annealing furnace from increase the effectiveness of the surface appearance, an innovative Danieli Centro Combustion includes further pickling process. Turboflo’s strip-drying system called confined a recuperative room to heat the

June 2019 | Metal Market Magazine | 81 ADVERTISEMENT FEATURE How Metalloinvest delivers high product quality in the digital age

transition to using flexible modular furnace (FMF) Metalloinvest technology. To increase the efficiency of the transportation of iron ore, Metalloinvest continues embraces Industry the construction of conveyor systems for transporting iron ore using cyclical and continuous 4.0 to power transportation technology and the crushing and conveyor facility. production and Production is not the only area being targeted by Metalloinvest’s strategy – increasing efficiency lies sustainable at the heart of the company’s digital transformation. Metalloinvest has centralized its IT development HBI-3 Plant at Lebedinsky GOK and digital business systems, increasing efficiency In the metals and mining sector, as in all major and reducing operational costs. It recently opened industries, the focus on climate change and towards production of higher value-added (HVA) a Centre for Innovation at Stary Oskol in environmental considerations has never been products. The company’s development strategy, collaboration with SAP and Accenture, who will stronger. Governments, public and private which was first adopted in 2015 and renewed this assist the company in developing solutions based investors and key stakeholders of major companies year, centres on increasing the production of HVA on the newest technologies, including artificial recognize the urgency and are pressuring the products – high-grade iron ore, high-grade intelligence, the internet of things and big data. industry to respond. As a result, there is a new trend pellets, and HVA billets and SBQ (special bar Furthermore, SAP and Accenture are helping in the steelmaking process to make production quality), and hot briquetted iron (HBI) and direct Metalloinvest consolidate its digital competencies more environmentally friendly. Steelmakers have reduced iron (DRI). To this end, over the last three on a single platform. started to shift from blast furnace production to years the company has invested about $1.6 billion Stary Oskol, a small town in Russia and home to direct reduced iron and electric arc furnace to upgrade its production facilities. Metalloinvest’s OEMK, is also the location of the production methods, which generate 70% fewer The state-of-the-art HBI production facility company’s data centre, the heart of the SAP S4HANA emissions than older processes. With newly (HBI-3 Plant) at Lebedinsky GOK (part of business suite system. SAP S4HANA unifies all users introduced carbon dioxide emission allowances in Metalloinvest) was launched in 2017. It is the largest on one system and demonstrates that Metalloinvest the European Union and steadily increasing costs HBI production facility in Russia and one of the is using this Industry 4.0 to its best advantage. for carbon dioxide certificates, steelmakers have to biggest in the world with a production capacity of What’s more, an increased focus on health and adapt quickly in order to mitigate the growing 1.8 million tonnes per year. The technology for the safety is in all the industry’s interest, when production cost base. direct reduction of iron used in HBI production is the considering the importance of boosting efficiency Companies like Metalloinvest, a leading global most environmentally friendly technology and streamlining companies. That’s why a central iron ore and merchant HBI producer and supplier, available for steel production from iron ore. During objective of Metalloinvest’s new strategy is to and one of the leading producers of high-quality the DRI process, there are no emissions associated become a “zero incident” company, leading other steel in Russia and the CIS region, are increasingly with the production of coke, sintering ore and pig Russian metals and mining companies in its opting for more environmentally friendly electric iron, as well as solid waste in the form of slag. compliance with international standards in and cokeless production methods, and using Similarly, high-grade pellet production industrial health and safety culture. higher-grade iron ore raw materials in steelmaking benefitted from the modernization of As Metalloinvest heads towards 2023, the to address these challenges. Metalloinvest’s Pellet Plant #3 at Mikhailovsky GOK, company will continue focus on increasing the Metalloinvest began to implement initiatives boosting the plant’s productivity by 5%. quality of its HVA products, maximizing its efforts to improving the efficiency of its operations and Modernization is also under way at the electric arc reduce environmental impact of its operations, quality of products a long time ago, shifting more furnace shop at Ural Steel, which is making the improving health and safety standards and using the power of digital transformation for the benefit of the company, its employees and other stakeholders, as well as the whole industry.

Metalloinvest Management Company LLC 28, Rublevskoye Roadway, Moscow, Russia, 121609 Tel.: + 7 (495) 981-55-55 Fax: + 7 (495) 981-99-92 E-mail: [email protected] Rolled steel products An employee of OEMK (part of Metalloinvest) Web: www.metalloinvest.com

82 | Metal Market Magazine | June 2019 Metals Technologies

strip up temperature; a direct-fired treatment and temper mill rolling, the strip shape. It can impart a flat, section with a multi-burner doors reducing intermediate stocking areas. positive bow or negative bow shape zone to completely clean the strip profile in an easy and repetitive way, surface (avoiding the installation of Temper finishing mill depending on the downstream the cleaning section); a radiant tubes The 450,000 tpy four-high mill stand processing requirements. zone equipped with 2P gas-fired processes annealed coils with a The main actuators for shape tubes for superior temperature 1,000-ton separating force and at a control are: positive and negative uniformity along the strip width; a jet speed of up to 630 meters per WR bending; positive and negative cooling section; and an equalizing minute. IR bending; IR shifting with flat zone for HSS grades production. The mill stand can operate with tapered roll or with shaped (OSR) The Danieli Kohler X-Jet wiping double work rolls diameter to tapered roll; differential IR shifting in

system allows very accurate control broaden the range of steel grades DANIELI case of shape asymmetry localized at of final zinc coating thickness down processed (from HSS to EDDQ ). The product range the strip edges; HAGC tilting; to 40 g per sq meter on each side (at The mill can operate in dry and wet includes multiple selective cooling to control the WR 180 meters per minute), giving mode and is equipped with a grades of material thermal crown. excellent coating uniformity along dedicated dust and fume exhaust the strip and consequent line system to guarantee safe operating A team effort operational expenditure reduction conditions. “Yıldız had the courage and by 5% per year. The mill is designed with an entry vision to build the most complete Since the beginning of operations, bridle for perfect rolling of thin cold-rolling complex in the region. the HDG Line has been running at material, an in-line inspection section The Danieli and Yıldız teams related the nominal productivity rate, with to check surface appearance, and an closely, working as one flexible, high quality standards that allowed electrostatic oiling machine to serve dynamic, lean team to create a plant Yıldız to enter the market at a very market requirements. designed and constructed for easy high level. Danieli Automation supplied all of and flexible operations and the electrical equipment and control maintenance; on-time and with Batch annealing furnaces systems for the entire complex, consistent performance,” said The annealing facility, with a nominal providing an integrated and Danieli division manager Tommaso production capacity of 300,000 tpy, optimized system configuration up Settimo. “In such a spirit of includes twelve working bases, six to Level 3. The single-source partnership, we can find together heating furnaces and six cooling bells. automation system and the with our customers the optimal The equipment, fully supplied by experience of Danieli Automation solutions for long-lasting success, Danieli Olivotto Ferrè, is state-of- provides a smoother project which is a powerful driving force that the-art technology for execution, a quicker start-up, and an unites us all.” high-convection coil annealing in easier know-how transfer to result in Dmitriy Voitekhovskiy of 100% hydrogen atmosphere, to high plant efficiency and yield, notes Danieli’s technical team for the ensure optimal heat transfer along the company. project said: “Our target was to coil width and perfect strip surface implement the most advanced cleanliness. Products and applications technological features, allowing a fast The high convection provided by The cold complex is designed to start-up of the plant with high quality the base high-flow fan guarantees the produce high-quality steel products levels from the beginning. Field absence of spot overheating on coil to enter both the local and results were really surprising and turns and uniform heating for the international markets at the highest even better than expected. whole mass of the coil. Consequently, level, satisfying the most demanding Performance levels were reached just the structure and the mechanical end users. The product range a few days after commercial properties of the annealed product includes white goods applications, production.” will be the same on all the parts of the commercial, structural and With its investment, Yildiz will coil, especially regarding tensile construction grades, IF, HSS, HSLA meet the need for high-quality strength and elongation. During the and DP material. flat-sheet metal products for the subsequent cooling cycle, finally, the Danieli notes that close white goods and automotive coil turns will not stick to each other, coordination with the customer on industry. It will offer its products to even with thin product. schedule, project details and project the market as Yıldız Demir Çelik, Decarburization is completely execution delivered successful which will be a replacement for avoided in the all-metal working results. The plantmaker adds that the imports in such industries. chamber. tandem mill start-up has delivered Yıldız Demir Çelik noted that, Danieli Olivotto Ferrè will also zero waste from day one, followed by having completed the first phase of supply an innovative set of nine a daily increase in throughput and its investment, in 2020 it will double final cooling units (DFCUs), quality, looking forward to completing complete a second-phase investment which perform an additional cooling all performance guarantees. of $350 million. The Yıldız Demir (from 160° to approximately 60°C) Çelik factory, where 450 people are of the charge after the “standard” Flatness results employed, will reach 750 people with annealing cycle. This shortens the Danieli reports that the tandem cold the completion of its second phase waiting time between annealing mill has achieved excellent results for investment.

June 2019 | Metal Market Magazine | 83

Iron ore Extracting value from Indian iron ore iron ore makes the largest Divisions over the best ways to exploit India’s contribution to the country’s extensive iron ore resources continue. Kunal Bose minerals basket. And after years of setback in the production of iron outlines the debate between steelmakers, iron ore, since it hit a peak of 218.55 million tonnes in 2009-10 as ore miners and the government exports to China boomed then, output once again exceeded 210 million tonnes in 2017-18 (see table). The country’s iron ore production and exports fell to a low of 156 million tonnes and 4.50 million tonnes, respectively, in 2015-16, impacted in part by the government’s decision to impose a punitive export duty and further by restrictions on mining in some areas because of environmental concerns. Other difficulties included land acquisition and the complexities involved in satisfying both environmental and forest regulations. India, which remains the world’s fastest growing economy with the IMF anticipating GDP growth at 7.3% in 2019-20 and 7.5% next year, was a hot destination for foreign direct investment in 2018, amounting to over $37.76 billion

SHUTTERSTOCK in 235 deals. Nevertheless, though a precise figure for the mining During his time as mines minister It was not lost on the Indian iron ore sector is not available, industry in the Indian government led by government that prosperity and production will need officials say the mining sector, the Bharatiya Janata Party welfare of the country’s large significant expansion including iron ore, has not (2014-19), Piyus Goyal said the population are an effective tool to to fulfil the nation’s attracted any significant foreign mining industry’s contribution to fight extremism, which has taken ambitions in investment in recent years. Foreign gross domestic product could be root in parts of the minerals-rich steelmaking groups generally do not seem to raised to about 3.5% from the countryside. There have been find the ground reality inspiring to then-prevailing 2.4% in the next instances of extremist groups put their money into Indian mining. few years, by annually raising sabotaging efforts to open iron ore minerals output. The idea was that mines in Chattisgarh and bauxite Domestic demand rapid development of the sector by mines in Andhra Pradesh, The steel policy announced in stepping up private and for example. 2017 says the country will be government investment in The Indian mining industry’s making 255 million tonnes of exploration, prospecting and share of national GDP was actually crude steel in 2030-31, based on a mining would be a sure way of down to 2.1% in the year ended capacity to be enhanced to 300 creating more wealth for the nation March 2018. Next only to coal, in million tonnes per year from the and economic opportunities in which India’s production is well present annual level of around 140 relatively remote rural areas. over 600 million tonnes per year, million tonnes. Steel production

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86 | Metal Market Magazine | June 2019 Iron ore

of that order will require iron ore India’s iron ore production and trade* auction. Since 2015-16, of the 19 output of 437 million tonnes, iron ore mines auctioned, as many Year Production Export Import which calls for an additional 227 as 14 ‘C’ category mines in 2009-10 218.55 117.37 0.89 million tonnes of output. Industry Karnataka were already in 2015-16 155.91 4.50 7.09 officials are, however, doubtful existence. Only five new blocks 2016-17 192.08 30.48 4.60 about the ore production target came under the hammer.” 2017-18 210.47 20.99 8.70 being achieved in the current Steel industry officials from 2018-19 (full year) 210.00 (11 months) 14.15 (11 months) 12.64 policy and regulatory *In millions of tonnes groups owning mills close to the environment, with long delays in Source: Indian Bureau of Mines and Ministry of Mines coast are keeping their options even routine permission for mining open to step up imports in case coming through. there is tightening of domestic A steel industry official says: This is in addition to the Geological supply as new steel capacity growth “What is true of iron ore is also Survey of India and Mineral picks up momentum. Sharma, going to be the fate of the steel Exploration Corporation Limited, however, believes “whatever the policy target of 161 million tonnes which for decades have been constraints, iron ore miners will of coking coal supply. The 2030-31 engaged in bridging the gap not be found wanting in doing their coking coal requirement is based between initial discovery of a best to meet steelmakers’ growing on projection that the blast- prospect and its eventual demand. Why should a nation with furnace/basic-oxygen-furnace exploitation. According to Sharma, iron ore resource of 33.276 billion route will have its share of steel “most of the PSUs given this tonnes, including 22.487 billion production raised up to 65% from responsibility do not, however, tonnes of hematite and 10.789 the present 40%. The policy says have the expertise and required billion tonnes of magnetite, be an coking coal import dependence is infrastructure to undertake importer of the mineral at any to be brought down to 65% from exploration of up to G2 and point? Give a push to exploration, 85% now. But the slow progress in G3 levels.” iron ore resource base will only opening new mines and setting up The government, which expand. This we have seen washeries to make unusually promotes reforms to attract happening in many countries, high-ash-bearing domestic coal foreign capital, does not want to be including Australia, Canada BF-use compliant make it doubtful seen to have virtually nationalized and Brazil.” if the targeted reduction in import the exploration part of the mining Miners in India tell the dependence will be achievable.” business. This and the realization government that the resource base RK Sharma, director general of that the public sector will not be of iron ore and other minerals will Federation of Indian Mineral able to deliver results – and as a continue to expand provided the Industries (FIMI), does not find result sufficient quantities of iron country steps up investment in any reason to disagree. ore will not be available locally to exploration by involving the Since mining is a highly capital feed the expanding steel industry private sector alongside public intensive business, its progress in – prompted the government to enterprises. An industry official, India will call for the “use of bring out a new National Mineral quoting an S&P Global Market high-end technology and Exploration Policy to make room Intelligence report, says: “India’s equipment for scaling up for private sector participation total spending of $15 million in productivity, ensuring safety of in exploration. exploration in2017 compares mine workers and protecting the According to BK Bhatia, poorly with $1.11 billion by environment of areas surrounding spokesperson for FIMI, private- Canada, $1.08 billion by Australia mines,” says a spokesperson for the sector participation, especially by and $560 million by Brazil. This Confederation of Indian Industry. foreign groups, will remain elusive needs quick correction.” That India will need an investment until the Mines and Minerals An immediate concern of of around $6 billion to meet (Development and Regulation) steelmakers based inland in 2030-31 iron ore requirements not Amendment Act, 2015 is suitably particular is the expiry of 232 only gives an idea of capital amended for seamless transition non-captive iron ore mining leases, intensiveness of new mines from the reconnaissance permit including 24 working and 208 development, but also of the (RP) stage to the next stage of non-working mines on March 31, urgency of FDI. prospecting-licence/mining-lease. 2020. These must be put up for Sharma says: “Exploration is the The present regime requires that a auction by state governments lifeline of mining. Intensity of RP holder hand over on successful before new leases are granted. exploration will have a bearing on exploration the explored block to Preparation for auction is a the level of mining in a country.” the concerned state government time-consuming process and then Following the promulgation of for it to subsequently put it up for the successful bidders will have to Mineral (Non-exclusive auction. Exploration is a high-risk secure a whole host of clearances Reconnaissance Permits) Rules, business and private parties do not from regulatory authorities before 2015, the central government find what is on offer attractive. actually starting iron ore assigned exploration rights to most Bhatia says: “If exploration stays at excavation. Steelmakers are facing public sector undertakings (PSUs) a low level, then you will hardly find the prospect of ore supply from the in the mining and metals sectors. any greenfield mines being put on country’s two leading producing

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states, Orissa and Jharkhand, ‘New Delhi reserves. To remain self-reliant in export duty on ore with up to 62% shrinking by up to 60 million continues to iron ore at this level of steelmaking iron content. As the government tonnes per year on expiry of the input, SAIL will be required to step has not obliged, iron ore mines present leases. use high duties up ore production to close to 100 have built up pithead stocks of The MMDR Act 2015 says that to discourage million tonnes per year by around 150 million tonnes – while the “leases granted before exports' 2030-31, from 27 million tonnes in mostly fines with potential to do January 12, 2015” to non-captive 2017-18. harm to the surrounding mines will expire in March 2020, However possessive SAIL and a environment. The two major steel those for captive mines will have few private sector groups, groups owning captive mines their validity till March 2030. particularly Tata Steel, may be of undertake selective mining to Bhatia says one way to avoid their iron ore assets, Bhatia says: extract only very high grades of ore “production disruption on a large “Steelmakers having captive mines to get the best blast furnace scale would be by giving lease are a uniquely Indian phenomenon productivity. extension to merchant mines to which has its origin over a century “The country has missed an March 2030.” ago when Tata Steel began opportunity to monetise pithead operation at Jamshedpur.” Some stocks by not removing export tax. Captive versus years later, IISCO, taken over by Moreover, as most of our mines are merchant mining SAIL, got leases over large tracts of small, mounds of stocks are In the meantime, pressure is iron-ore-bearing areas when it was interfering with their production,” building on the government that, run privately. says Sharma. An Orissa-based in pursuit of the objective of the Bhatia believes that mining and merchant miner says: “The 30% national mineral policy of metal making require altogether duty that robs Indian ore of price “rationalising reserved areas” held different skill sets: “A miner is competitiveness in the global by PSUs, Steel Authority of India unlikely to be a great steelmaker. market has not allowed us to reap Limited (SAIL) and the country’s Conversely, the latter will not have benefits from the January tailings biggest iron ore producer NMDC anything great to show as a miner.” dam disaster at Brazil’s Vale and should be made to surrender the Nevertheless, in India many production disruptions in Australia “undeveloped iron ore blocks in steelmakers want to have their own due to March cyclonic storms.” their possession.” Contesting the mines. Similarly, NMDC and Beside export tax, under court demand, both SAIL and NMDC Vedanta, which was the biggest order the mines in Karnataka are maintain that, although their iron ore producer in Goa before all not allowed to export iron ore. In present ore production may not be mining leases in the state were addition, pellets made in the state in alignment with their mining cancelled by the Supreme Court in using local ore cannot be sold in the capacity and reserves, they have February 2018 and is the largest world market. ambitious plans for the future. mining entity in Karnataka, have It is no wonder then that, For example, NMDC has a forayed into steelmaking. NMDC between April 2018 and February target to produce 100 million is in the last lap of commissioning a 2019, India could export only tonnes of ore by 2030-31 by 3 million tonne per year steel mill 14.15 million tonnes, by contrast comparison with 35.5 million at Nagarnar in Chattisgarh. with 20.99 million tonnes in tonnes in 2018-19. NMDC Vedanta recently acquired a 2.5 2017-18. In the first 11 months of chairman Baijendra Kumar says million tonne per year steel plant in 2018-19, strong demand from “people, however, believe we are Jharkhand and wants to raise its coastal mills, particularly in capable of producing 150 to 200 capacity to 5 million tonnes Karnataka, led imports to rise to million tonnes of ore.” JSW Steel per year. 12.64 million tonnes, against 8.70 managing director Sajjan Jindal, for million tonnes in the full year of example, believes that NMDC has Export-import 2017-18. technical and financial prowess to Advised by steelmakers that India Karnataka-based mines achieve production capacity of 200 should conserve all its iron ore complain that the state’s coastal million tonnes in the course resource despite its gigantic size mills are importing iron ore with of time. and huge potential for new the “sole objective” of keeping the SAIL is aware that the ministries discoveries for local value addition, prices of local ore down. High of steel and mines are under New Delhi continues to use high imports are hurting Karnataka pressure from merchant miners duties to discourage exports. Iron miners since the court order and standalone steel mills that ore producers find no merit in the restrains them from selling iron ore there should be a “detailed study of government continuing to charge in other parts of the country. iron ore reserves of PSUs and their an export duty as high as 30% on India’s ore production in 2018-19 utilization leading to release of the lump and fine ore with iron content is estimated at 210 million tonnes, surplus for auction.” But SAIL, of 58% and more. The mining more or less the same as the 210.47 which wants to lift crude steel industry argues that since the local million tonnes in 2017-18. capacity from 21 million tonnes to steelmakers and producers of Unfettered exports will help the 50 million tonnes by taking sponge iron have a distinct industry to clear pithead stocks and advantage of surplus land at its preference for high grades of ore, lift production at the same time, disposal is very possessive of all its the government should waive says Sharma.

June 2019 | Metal Market Magazine | 89 Market spotlight: High-performance metals Pushing performance materials ever higher

governmental pressures, including Ever more demanding applications for metals more stringent fuel economy and continue to push greater efforts to increase their emissions standards to go into effect in 2025-2030 in the United States performance. Myra Pinkham reviews recent progress and Europe, and increased electric vehicle sales, continue to push automakers worldwide to find ways Recent technological innovations to achieve greater efficiencies. – particularly those related to the Using lighter weight metals and materials used in such high-end metal components for anything that markets as the automotive, moves people and/or goods just aerospace, defense and medical makes a lot of sense, says Alan Taub, industries – have been very senior technical advisor for supportive of demand for a variety Lightweight Innovations for of high-performance metals. That Tomorrow (LIFT), which is has driven companies and research operated by the American organizations alike to develop new Lightweight Materials alloys and production processes to Manufacturing Innovation fulfill this growing need. Institute, explaining that such Top on the list of the objectives in lightweighting helps to either recent high-performance metals increase the fuel economy or the innovations is to develop metals ability to increase the payload for that help original equipment various types of transportation. He manufacturers (OEMs) to notes that for automobiles there is, cost-effectively lighten the weight on average, $5 of fuel cost savings of their products – including per kilogram of lightweighting, through higher strength metals that while for commercial aircraft that also have other benefits – and to fuel saving is about $500 per find materials that work in kilogram. increasingly high temperature and He says that one technology that other challenging environments has recently been seeing broader without compromising performance. use in both the aerospace and Another big push has been made automotive applications is super- in efforts to develop powders for 3D vacuum high-pressure aluminium printing, or additive manufacturing, die casting – a process that is and other metal products that could already in use in Europe, but is now help to limit scrap generation, and starting to also be implemented in in equipment for more efficient North America. Utilizing production and testing of newly CONSTELLIUM integrated computational materials developed high-performance metal engineering (ICME), this alloys for various end-use Spurred on Freeform bending of technology allows companies to applications. “Much of the development work is aluminium extrusions achieve lower levels of Many industry players point out being spurred by a pull from at the Constellium microporosity in their castings, that much of this could be described end-use customers, who want University Technology which, in turn, lets them achieve as more of an evolution than a products that are environmentally Center better fatigue performance and to revolution, being accomplished by sound and can reduce fuel make thinner walled castings, and tweaking the chemical composition consumption,” Christine Keener, therefore lighter weight and properties of existing alloys to vice president of commercial and components. create innovative new products, strategy for Alcoa Corp.’s Taub says that the greatest benefit resulting in some real benefits for aluminium business unit, points is achieved when using this type of end-use customers. out. She also notes that casting with heat-treatable

90 | Metal Market Magazine | June 2019 aluminium alloys as, due to the low Advanz 6HF-e200 is quite an porosity, those alloys can be heat improvement over the previous treated without blistering. generation in terms of formability, However, he adds that the ability to Fusion goes an extra mile in produce thin-wall castings with this formability given that it allows casting method is generally simultaneous casting of multiple applicable to a wide array of alloys into one product. For aluminium alloys. example, a product with a very highly formable core that also has a Automotive demand very high quality surface could be There have been several achieved. Labat says that these two high-performance aluminium products, which are both already casting alloys that have been commercially available, tend to be recently introduced aimed at the CONSTELLIUM used for exteriors of vehicles when auto market. For example, late last OEMs are looking for stiffness and year Alcoa introduced its EZCast- In 2017 Constellium introduced Testing an aluminium sharp design traits without the NHT™ non-heat treatable alloy, its HCA6 high-strength (280 MPa), crash management weight of steel. which Keener says has good high-crush 6000-series alloy, system Rio Tinto Aluminum has recently mechanical properties for both enabling the production of fully introduced its high-strength automotive structural parts and for crushable extrusions with no Revolution-Al auto wheel alloy, battery trays for electric vehicles, cracking. Jarrett says that several which it says could reduce wheel which tend to be prone to larger major automakers, including Ford, weight by 7% while offering similar distortion during heat treatment. BMW and Audi have been using ductility to A356, with its higher Several aluminium producers these alloys, which, when used magnesium content allowing for have also recently introduced, or together in already intensive crash higher strength and with the plan to shortly introduce, high- management systems could lighten addition of manganese helping to strength aluminium alloys for the their weight by as much as 25-30%. reduce elongation. Revolution-Al is automotive market, both for Novelis Inc. is in the midst of said to have 20% greater yield lightweighting and certain other developing 6000- and 7000-series strength than A356 while being less purposes, including greater damage high-strength aluminium alloys for impacted by cooling rate variations. tolerance when a vehicle is involved the automotive market, which are “This allows our customers to make in an accident. Another factor, Abe expected to see their first a better wheel, which in the end Vadhavka, director of materials and commercialization later this year makes cars that are safer, more fuel manufacturing technology for the with introductions ramping up over efficient and appealing to end Center for Automotive Research the next two years. Pierre Labat, the consumers,” Alf Barrios, Rio Tinto (CAR), says is the “tug of war” company’s vice president of global Aluminum’s CEO, says. between aluminium and advanced automotive, says that this summer high-strength steels, including Novelis expects to commercialize a Aerospace demand newly developed third-generation 6000-series alloy with a tensile Meanwhile, for aerospace AHSS, for automotive applications. strength greater than 350 MPa, applications, Magnesium Martin Jarrett, technical director which it plans to follow a couple Elektron’s Elektron 43 magnesium for Constellium’s automotive months later with a 7000-series alloy was recently certified for use structures and industry business alloy with a tensile strength of for certain commercial aircraft unit says that his company has been greater than 500 MPa. interior components. It provides a at the forefront of the development Labat says that its new way to lower the weight of the of such high-strength alloy 6000-series alloy is designed to aircraft if it is used instead of development with the 2017 remain ductile and can be formed aluminium alloys for such interior introduction of its HSA6 alloy, by typical cold forming at OEMs components as seats. which he maintains is still the and Tier 1 parts suppliers. Titanium continues to make highest strength 6000-series However, he says that the new gains too, especially in several aluminium alloy currently 7000-series will require hot critical aerospace and defense available to the automotive stamping as an additional process applications, helped by the fact that market. It has a tensile strength of step for customers to achieve the it is not just lightweight but its alloys more than 400 MPa, generally ductility and elongation that they can operate at higher temperatures. replacing alloys with only about require. Greg Himstead, vice president, 300 MPa tensile strength. Jarrett This follows Novelis’ recent sales and marketing for titanium says that such high-tensile strength introduction of its Advanz distributor Titanium Industries, was previously only possible 6HF-e200™ heat treatable notes that most new titanium alloys with 7000-series alloys, which are aluminium casting alloy and Fusion derive from the evolution of more difficult to produce and are technology, first in Europe and last existing alloys. not recyclable to more standard year in North America, also for One significant new alloy is the 5000- and 6000-series automotive automotive and motorcycle ARCONIC-THOR titanium alloy, alloys. applications. Labat says that while which was introduced last year by

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Arconic Inc. for use in the hotter smaller, more intricate components sections of jet engines. Arconic – reduces the aerospace buy-to-fly states that it is nearly 50% lighter ratio, relating to the amount of than incumbent nickel-based material needed to make the part superalloys and has three times and the amount of material that is better oxidation resistance than required to be machined away. conventional titanium alloys – Fuller says this is very important advantages that translate into cost for titanium as it relatively expensive savings and greater fuel efficiencies. compared with other aerospace Available in sheet, plate, foil, billet, metals used in structures, and is rolled rings, forgings and expensive to machine. He points extrusions, it is formable, heat out that another benefit of additive treatable, forgeable and weldable manufacturing in general is that it and has acceptable oxidation dramatically reduces lead times resistance, even at temperatures ALCOA and the capital cost of forging dies. that are as much as 200 degrees Retech’s Jackson says that Fahrenheit higher than those generation in coal-fired power EV powertrain with a additive manufacturing has suggested for previously available plants, which he says is just around number of structural stimulated atomized metal powder high-temperature titanium alloys. the corner. components where production and development, There has also been some Alcoa’s EZCast-NHT™ which until recently exhibited development of new titanium 3D printing can be applied relatively slow growth. There is aluminide alloys. Christopher There has also been some certainly more activity now. For Jackson, director of new business movement in alloy development example, Carpenter Technology development and sales for Retech and certain processes aimed at the Corp. has recently developed a set Systems LLC, says that while some growing interest in 3D printing or of alloys specifically for 3D printing of the interest is in titanium additive manufacturing, which and in mid-May formed an additive aluminide powder, these alloys are LIFT’s Taub says is beginning to be manufacturing business unit. being introduced by various deployed for the production of Jackson says that for titanium titanium producers in cast and complex aerospace parts made two areas where there has been a lot wrought form as well, given the from such high-performance of development work and higher- alloys’ lower density and high metals as titanium, nickel-based volume production has been for strength. alloys and aluminium, and is likely 6Al-4V (6-4), commercially pure While one driving force for to be used further as the speed of (CP) and titanium aluminide titanium aluminides has been in jet 3D printing increases. powders, with 6-4 and CP powders engines, given higher operating While there has yet to be any taking the lead for the time being. temperatures, Jackson says another commercial production of 3D “But I think that the aluminides popular use is for automotive printed rotating jet engine parts, will catch up as companies continue turbocharger wheels. He says that but rather only printing of less to specify the material,” he says. in both applications aluminides critical aerospace parts where there Recent alloy development work offer great benefits over nickel is less of a dynamic load, Jackson has also supported development of alloys, particularly given the ability says that there has been some new testing technology and to reduce rotational inertia in testing to also enable that to be equipment, Malini Hoover, CEO components using these alloys. done in the coming years. of Advanced Optical Technologies Gary Coates, manager of market Meanwhile, 3D printed parts are (AOT), points out. She says that her development and technology for also finding applications in the company has developed a new type the Nickel Institute, says that much automotive and medical sectors. of crystallographic imaging sensor of the development of new nickel This demand has supported both for use in its patented polarization alloys recently has been geared powder-based and wire-based grain-orientation imaging towards military and space technologies and the metals they nondestructive testing technique exploration, including rocket use. For example, Charles “Chet” that is currently in the process of engine applications. He points out Fuller, chief commercial officer of being commercialized for the that there has also been some Norsk Titanium, says that there is a testing of titanium alloys. She says modification of existing nickel tremendous need for his this technique is less labor intensive alloys, making them higher company’s Rapid Plasma and time consuming than current strength and more corrosion Deposition (RPD™) wire-based more destructive testing resistant so they could be used in additive manufacturing techniques, such as electron certain downhole oil and gas technology, in which wire is melted TITANIUM NORSK backscattering diffraction (EBSD) applications in fields with high precisely in an inert, argon-gas Completed and spatially resolved acoustic hydrogen sulfide content. He says environment to reduce the cost of commercial spectroscopy (SRAS). Hoover says there is some similar development titanium components and forgings. aerostructure that AOT has testing solutions for work for nickel alloys for He says this occurs as this titanium part such other metals too, including high-temperature applications for technology – like powder next to its near-net beryllium, magnesium, zinc, tin, advanced ultra-supercritical steam technologies that are being used for RPD™ form zirconium and uranium.

June 2019 | Metal Market Magazine | 93 METALS | CHEMICALS | BUILDING PRODUCTS | TRANSPORTATION & LOGISTICS | LIQUIFIED NATURAL GAS

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New applications New applications for aluminium include the EV battery housing made from aluminium by Novelis (see box). Material choices Volkswagen Group too has been highlighting its modular electric toolkit (MEB) platform, based on an extruded aluminium spaceframe. The carmaker is rolling this out to for EV production third parties to be showcased in small-series cars such as the ID. Material choices for electric vehicle production Buggy, Audi e-tron GT, Skoda Vision iV and Seat Urban. The e.Go, based are widening as the growing number of new EV in Aachen, Germany, has been the first partner to use Volkswagen’s models accelerates. Seema Chaudhary reviews MEB e-mobility platform. recent developments Meanwhile, Tesla has said that it will be reducing aluminium and titanium in its Model 3 chassis in The relative merits of steel versus favour of a “mix of materials”. Tesla’s aluminium for stakeholders in the steel-intensive Model 3 is the smallest automotive industry have always and cheapest model by Tesla to date elicited hot debate, which continues and geared towards the mass market with the steady movement of − further marked by the company’s manufacturing towards electric breaking ground on a ‘Gigafactory 3’ vehicles. Whichever material tops plant in Shanghai, China, to begin the wish list among engineers and production by the end of the year. designers on the back of fuel economy Jaguar has also entered the EV and emissions standards by 2025, market with its aluminium-intensive manufacturers are clear that safety I-Pace. The Chinese population are a and sustainability will feature strongly. VOLKSWAGEN good model to look at for the EV The trend towards lightweight revolution, with nearly half of EV cars construction has facilitated the grades of AHSS and generation 3 Volkswagen’s sold in 2025 expected to be from that growing popularity of aluminium (Gen3) grade steels in 2019 and ID. Buggy concept country, according to Bloomberg’s and plastics in automotive thereafter for future vehicle platforms. car features its Electric Vehicle Outlook 2017. manufacturing. But a recent study Components made from its advanced MEB toolkit BMW will be constructing the i5 commissioned by Voestalpine from steels are designed with durability, in steel and light alloys from 2021, the German Handelsblatt Research crash energy management, rather than using carbon fiber, which Institute (HRI) highlights that the appearance, formability and cost in dominated in the i3. “development of innovative high- mind. U.S. Steel notes that its steel is Barriers to entry faced in traditional and ultra-high tensile steel grades “formable, weldable, strong and has car manufacturing are opening up, also secures the long-term future of state-of-the-art coating that will help with new market entrants such as steel in the automotive industry, resist corrosion,” (see table). It adds vacuum cleaner manufacturer Dyson because not only is the material both that the load paths on the evolving recently filing its patent for a premium lightweight and tough, it is also easy battery electric-vehicle (EV) body aluminium-based model of EV. to process, can be recycled, and is structure are ideally suited for AHSS According to Al Bedwell, director cost-efficient.” and Gen3 steels, for increased safety, of global powertrains at LMC The use of advanced high-strength lower mass and lower manufacturing Automotive, steel has some clear cost steel (AHSS), however, is already a carbon-dioxide emissions. advantages: “My feeling is that steel material of choice for the chassis, or New steel grades have 3-4 will dominate in the mass market EV body in white (BIW), and main times the tensile strength of segment, mostly for cost reasons. closures, such as hoods and trunk conventional steel, making them of Premium and exotic EVs are more lids, of smaller and lighter cars. In great value for safety, while also likely to use aluminium. But with addition to its use in some models of extending the electric vehicle range advances in steel specification and car, aluminium has found by reducing weight. construction techniques, the weight widespread use in bigger vehicles, saving of aluminium over steel may such as SUVs and lightweight trucks U.S. Steel generation 3 and martensitic steels not be that great.” Composite for components such as bumpers, 780XG3™ 800 MPa Generation 3 steel construction is another option, but crash boxes and wheels. 980XG3™ 1,000 MPa Generation 3 steel this carries a significant cost penalty, 1180SHF 1,200 MPa SHF Bedwell notes. New steel grades Mart-Ten™ 1,500 MPa Ultra high-strength martensitic steel Abe Vadhavkar, director of To meet demand, steelmaker Mart-Ten™ 1,700 MPa Ultra high-strength martensitic steel materials and manufacturing U.S. Steel is introducing several new Source: U.S. Steel technology at the Center for

June 2019 | Metal Market Magazine | 95 End-user spotlight: Automotive

Automotive Research (CAR), says: “My thoughts are that the Novelis makes strides automobile industry is highly cost The price of vehicles for the mass market and driven, which will continue to be a methods for lightweighting them are constant limiting driver. The base cost of steel considerations for the automotive sector. For is lower along with the legacy electric vehicles, range between charging is a key equipment cost of welding being factor. Ganesh Panneer – vice president and lower as well.” Vadhavkar highlights general manager automotive at Novelis North that “technology is mature when America which is a member of the Aluminium using existing machinery and this Transportation Group (ATG) – says that while NOVELIS will make it more difficult to move to there is a lot of talk surrounding the popularity of Novelis utilizes Advanz™ in its EV exotic materials.” steel versus aluminium in the main body of battery enclosure “Moreover when we go into the electric vehicles, range is a key consideration for area of automated vehicles, which consumers. “Having a lighter vehicle body is one launched the ES8 using Novelis’ high formability reduces the need for driver way to save weight and aluminium is well-suited Advanz™, which delivers greater bending and involvement and requires sensors, to this,” says Panneer. weight savings to automakers. mass reduction will be a critical Novelis has developed an aluminium-sheet Panneer notes that there are a number of factor in the cost equation, which is a battery enclosure utilizing Advanz™, providing a factors when OEMs select materials, for which consideration that always drives sustainable battery solution for a market that is safety and sustainability make aluminium a good high-volume manufacturing,” expected to triple by 2025, according to the choice. Aluminium-intensive vehicles have Vadhavkar says. company. Being 50% lighter than the steel received five-star accreditation from the National Manoj Madhaven, principal and equivalent is a boon for mass production of the Highway Traffic Safety Administration registered investment advisor at battery enclosure, and the design is more (NHTSA), which tests the safety of cars. The Ford Oxford Chase Advisor, comments: cost-effective than aluminium extrusion and F150 pick-up is one such model five-star rated for “Electric vehicle makers are focused casting-intense designs. safety, says Panneer. The current Ford F150 on increasing range and one of the “Novelis is working on new grades with higher model is also considerably lighter than its key factors is weight. Manufacturers strength and greater formability as we increase predecessor. will move away from steel in the long strength and reduce thickness and improve Mixed materials and the joinability of term and this could be towards alloys formability to stamp complex shapes,” says aluminium is a key consideration. New joining or could be carbon. Although now Panneer. technology can effectively connect through carbon fiber is very expensive, over Panneer cites start-up manufacturers that have riveting, welding and structural welding. time we will see a drastic reduction been at the forefront of sustainable electric vehicle Panneer cites the forecast commissioned by in cost. There is a lot of promise with design using aluminium body parts. This has been ATG from Ducker Worldwide 2017 on key carbon composites as you don’t have seen at US automakers Rivian and Faraday trends and factors to consider for aluminium’s to mine it and it can be manufactured Futures. China’s EV manufacturer Nio recently continued popularity (see table). in the lab.” Low-cost carbon fiber Zoltek PX35 is featured in the Uniti electric car in Sweden, for example. composites, this will be hampered don’t have with press-hardened Vadhavkar notes that composite because of recyclability issues. hot-stamped steel,” says recyclability has its down side, Aluminium can be 100% recycled Vadhavkar. saying that “while there are more when separated by grade.” He notes that in terms of and more applications of Moreover, says Vadhavkar: materials usage, innovative additive “Aluminium usage will grow in the manufacturing techniques will play Aluminium penetration forecast for future as we go towards a part, with the use of combined lightweighting because the electric manufacturing processes, such as hoods, doors and BIW vehicle range sensitivity means you combining stamping with additive Aluminum hood penetration have to take weight out.” manufacturing in steel. This would Will increase from 50% in 2015 to 71% in 2020. Hoods mean taking the part and adding will account for 25% of the of the total 2020 closure Bonding and forming material only where needed, which weight, and doors will be 43% In future, manufacturers will you could not possibly make with differentiate by their expertise in traditional methods, and this will Aluminium door penetration bonding, joining and forming play a part in lightweighting. Will increase from less than 5% in 2015 to slightly over technologies. Innovation in special In a pointer to the future, CAR 25% 2020; Prior to 2014, there were virtually no alloys with a higher silicon and in collaboration with Lightweight aluminium doors in North American-produced vehicles, aluminium content can alleviate the Innovations for Tomorrow save for the Tesla Model S loss of heat in an EV motor during (LIFT), operated by the American magnetic reversal by up to 30%, Lightweight Materials BIW (in some cases complete BIW) according to the HRI study. Manufacturing Innovation Institute Nearly 25% of 2028 vehicles will have partial aluminum; “Third-generation advanced (ALMMII), is implementing a 2.1 million of those vehicles will be pickup trucks; high-strength steel is cold stamped project to test and evaluate 400,000 will have PHEV/ZEV powertrains as opposed to hot stamped. mixed-material joining technologies Source: Ducker Worldwide Cold-stamped high-strength steel to save on weight and production has issues like springback, which we costs.

96 | Metal Market Magazine | June 2019 Innovations

ArcelorMittal project to look at ‘green’ Hydro upgrades hydrogen for Hamburg DRI plant casting operations

ArcelorMittal is earmarking €65 “Our Hamburg site offers to meet advanced million ($73 million) for a project optimum conditions for this automobile needs to use hydrogen on an industrial innovative project: an electric arc scale for the direct reduction of furnace with DRI system and iron Hydro Husnes in Norway will iron ore in steelmaking to greatly ore pellets stockyard as well as revamp its casting operations with lower CO2 emissions. decades of know-how in this area. ARCELORMITTAL new technology to produce more The plant in Hamburg is The use of hydrogen as a reducing ArcelorMittal’s advanced semi-products for the already efficient in using natural agent shall now be tested in a new Hamburg plant automobile aluminium forging gas in a direct reduction plant shaft furnace,” Frank Schulz, chief is already one of market. (DRI) production process. In the executive officer of ArcelorMittal the most energy- The company will invest coming years a pilot plant will Germany, said. efficient in the NOK150 million ($17 million) with follow there to target not only the ArcelorMittal has invested Group operations expected to commence use of alternative raw materials €250 million in various carbon in 2020. but also the direct avoidance of emissions reduction The new in-house low-pressure carbon (CDA). technologies, such as in Ghent casting (LPC) technology, once It is planned that the University where waste carbon gases upgraded, will strengthen Hydro’s of Freiberg will collaborate on the will be used for the production offering for materials in niche project which will initially take of alternative fuels or in segments like forging stock, thus place on a demonstration scale chemical products. It is also enabling efficiencies in cost and producing 100,000 tonnes per testing methods such as biocoal quality. year. In the future the plant should from waste wood as an alternative “The key for us is the flexibility to also be able to run on green to coking coal as a reducing agent be able to cast both extrusion ingots hydrogen from renewable sources. in blast furnaces. and forging materials according to customer demand in a flexible and efficient way,” Johan Berg, plant manager at Hydro Husnes, said. NASA makes new 3D printed copper Customers will be able to produce forge stock in a large alloy for aero components casthouse from liquid metal from electrolysis compared to the NASA has developed a new and fuel injector faceplates using traditional smaller scale casthouses copper-chromium-nobium alloy Concept Laser’s M2 3D printer. typically based on melting ingots for use in rocket propulsion GE Additive has a 75% share of and horizontal casting methods. components within propulsion Concept Laser. The machine was The demand for aluminium engines and which, according to used because “it had proven to be forge stock is high, said the company. NASA researchers, can potentially ‘copper friendly’ with its inert Forge stock can be used for car “equal to or exceed their traditionally glovebox and build chamber, and suspension arms and knuckles in manufactured predecessors.” the 400W laser could achieve the the automotive industry – an area NASA Marshall Space Flight high-energy density needed to which is demanding more of the Center (MSFC) and NASA Glenn fully melt the ‘42’”. metal to fill its lightweighting for Research Center (CRC) in the US It was developed for use in energy efficiency along with went on to successfully print the rocket propulsion components performance and safety requirements. near-fully dense and functional that needed high thermal “The investment is timed well alloy GRCop-42 using powder- conductivity, excellent creep with the ongoing upgrade of Hydro bed fusion, with 50% thicker layers resistance, low-cycle fatigue life, Husnes’ second electrolysis line that (0.045mm) than its predecessor and strength at elevated is due to start operations in 2020, GRCop-84. temperatures such as combustion with an annual planned output of Researchers have demonstrated chamber liners and fuel injection 210,000 million tonnes of aluminium that the alloy is readily printable face plates. semi-products,” Berg said. and can be additively Initial parameter tests using manufactured into fully dense average porosity and pore size components with consistent showed good technique for properties at higher throughput predicting mechanical properties, rates than the alloy GRCop-84, particularly in elongation values. which was hot fire tested in 2016 The lower ‘42’ Cr and Nb HUSNES HYDRO and 2017. content has made it easier for Hydro Husnes will produce They produced printed parts powder vendors to process but was more aluminium for forging such as combustion chamber liners not easily available before.

June 2019 | Metal Market Magazine | 97 End-user Tokyo 2020 Olympic torch created Thyssenkrupp using Al extrusion technology Schulte’s The Tokyo 2020 Olympic relay structural torch housing has been manufactured from a seamless steel supply sheet of part-recycled metal using traditional and contemporary Thyssenkrupp Schulte, part of aluminium extrusion the Materials Services Business manufacturing know-how from Area, has proven to be a reliable UACJ Extrusion Corporation. partner for Germany’s The technology was also used in construction industry by the making of the Shinkansen bullet providing special structural steel train, according to Japan’s official for “solid and durable equipment Tokyo2020.org website. for difficult subsoil,” such as The gold-coloured torch is made drilling rig masts and crane from approximately 30% recycled booms, said the company. material originally from the The company offers tailor- temporary prefabricated housing TOKYO2020.ORG made services for its 70,000 used after the 2011 earthquake and customers providing around tsunami disaster that hit Japan’s catalytic reaction which supports The Olympic 50,000 tonnes of structural steel Tohoku region. the red flame of the torch. 2020 relay torch per year of which 90% is from The torch design by Tokujin The continuous-flame 71 cm production process both the XAR® portfolio and Yoshioka Inc communicates the length torch weighs around 1.2kg uses both old and Thyssenkrupp Steel Europe’s steps taken in building a sustainable and will tour the entire length and new aluminium high-strength N-AXTRA®. future from sustainable materials, breadth of Japan. extrusion Thyssenkrupp Schulte has in its design as a single flame with The central symbolic light and know-how provided one such customer − five separate flames emerging from Sakura cherry blossom shape when Bauer Maschinen GmbH − with a flower petal shape. viewed from above represents the 350 tonnes of special structural The torch relay will be held for concept of ‘hope lights our way’ to steel, just-in-time and tailored to 121 days. To keep the flame coincide with the cherry blossom its needs for foundation burning bright, the torch features season in Japan in March 2020, engineering parts used in extreme two combustion mechanisms; a when the Tokyo 2020 Olympic conditions. Proximity to its high calorific blue flame and relay will begin. customers is an important consideration says Thyssenkrupp. “We ensure that our partners Hydro and Sowitec mull floating solar receive only the finest materials. Special structural steel is particularly remarkable for its power project for Pará operations wear resistance, which makes the equipment extremely resilient Hydro and Germany-based Brazilian antitrust authorities and tough,” Christoph Hartmann, renewable energy company approved the joint venture on regional coordinator for special Sowitec are collaborating on May 6, along with several structural steel at Thyssenkrupp potentially installing a large-scale authority permits necessary for Schulte in Munich, said. floating solar power plant on Lake the project to get under way. A key consideration says Tucurui in Brazil, which could Details of the plant size or cost Thyssenkrupp is the strength of reduce emissions at Hydro’s were not yet available given that SHUTTERSTOCK materials the industry requires operations in Pará, including the the project is currently at an early Hydro venture looks where the wall thickness of steel alumina refinery Alunorte and planning phase. Hydro and at floating solar can be reduced without losing primary aluminium plant Albras. Sowitec think it will be around power solutions for load-bearing capacity – an “Hydro has a clear strategy to two years to know if the renewable Pará operations important consideration also for further reduce emissions from our electricity project can be profitable. the movement of heavy vehicles operations. Increasing our use of “If we succeed in realizing this in extreme environments. clean energy is an important project, it will be an important Thyssenkrupp Schulte is part contributor to achieving that milestone for floating solar of Thyssenkrupp Materials target,” Arvid Moss, executive development in Brazil,” Frank Services which has 480 locations vice president of Hydro’s energy Hummel, chief executive officer in 40 countries. business area, said. of Sowitec, said.

98 | Metal Market Magazine | June 2019 Access our Daily US Midwest HRC Index

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