Iran has launched the first indigenous direct reduced iron (DRI) plant in China.
MME (Mines and Metals Engineering GmbH), an Iranian engineering company registered in Germany, designed, implemented and set up the first DRI production plant in the world's largest steel producer using the "Persian Reduction" method, or PERED.
China, which ranks first in the world in steel production, mainly produces the energy-intensive DRI by blast furnace method, but the country is using Iranian technical and engineering know-how for overcoming environmental challenges.
DRI, also known as sponge iron, is produced from direct reduction of iron ore in the form of lumps, pellets or fines by a reducing gas. It can be processed to create wrought iron.
Crude steel is dominantly produced using two methods: making cast iron in blast furnaces or using DRI and scrap in electric arc furnaces.
More than 70% of the world’s steel are made using blast furnaces, while Iranian steelmaking is mostly dominated by EAFs.
Choosing each production method depends on various parameters, namely raw materials and energy costs.
Blast furnaces require large quantities of coking coal, a product hardly available in Iran and costly to import. This is while the country enjoys huge gas and iron ore reserves, making EAFs the much more desirable route to take. The shortage of scraps has consequently driven steelmakers to use DRI.
With such a sizable production, cost-cutting would give a considerable boost to the industry. And PERED is designed to do just that, MME claims.
By using the production technology, services and equipment, the Chinese company aims to increase its iron ore processing productivity and reduce emissions.
MME Managing Director Morteza Aqajani has enumerated PERED’s superior aspects vis-a-vis other iron reduction methods, in an article published on Iran Steel Producers Association’s news agency Chilanonline.com.
PERED Advantage
The PERED reduction process is known to be more efficient, employs improved cooling methods and cuts gas emissions.
With less heat, more homogeneous reducing gas, more controllable pellet feed and use of centrifugal compressors, PERED requires less water, electricity and gas to operate, alongside lower operational and maintenance costs.
The PERED technology, which makes optimum use of energy and raw materials, reduces production costs with the added advantage of being more environment-friendly compared to other direct reduction methods.
According to MME’s website, PERED can produce cold and hot-rolled DRI, Hot Briquetted Iron and combinations of all three.
The contract for the construction of the first Iranian direct-reduction technology was concluded between China’s Shanxi Taihang Mining Co. Ltd (CSTM) and MME of Iran as the owner of the technology.
Speaking to Financial Tribune in an exclusive interview in 2018, the engineering manager of MME, Hossein Aziztaemeh, explained that the contract with CSTM to import the Iranian technology was signed on May 13, 2013. However, the implementation of the project was delayed over the years due to several reasons.
"The Chinese side did not find the production of direct-reduced iron economically viable, but things changed after the Chinese government imposed heavy taxes on ‘unclean’ industries," he said.
Therefore, they decided to move toward cleaner industries, as they seemed more viable.
The project was launched on June 21 in Taiyuan, the capital and largest city of Shanxi Province of China with a production capacity of 300,000 tons of HBI per year.
The furnace in this plant has been designed by MME and some of its main equipment were made in Iran and exported to China. Currently, due to the lack of access to natural gas, this factory is using gas from the coking oven.
MME has several responsibilities in the project, namely offering engineering services, selling equipment (completely manufactured in Iran), supervising and offering relevant training, according to Aziztaemeh.
The official explained that there are generally three methods for DRI production: HYL process, presently marketed under ‘Energiron’ trademark, jointly developed by Tenova and Danieli; MIDREX Process patented by Midrex Technologies Inc. along with its parent company Kobe Steel Ltd; in addition to PERED.
The replacement of MIDREX and Energiron with PERED will cut the production costs by reducing the required initial investment and operational costs. Moreover, it is more eco-friendly.
Domestic Situation
According to Aziztaemeh, a majority of DRI plants in Iran were utilizing the MIDREX reduction technology. But with the adoption of the new, indigenous DRI production process, the country’s steelmakers can count on increasing competitiveness.
PERED has so far been used in Iran’s steel projects of Shadegan in Khuzestan Province, Miyaneh in East Azarbaijan Province and Neyriz Steel Company in Fars Province.
Shadegan Steel Company started the hot commissioning of its DRI module in May 2017 as the first plant to utilize PERED.
Miyaneh Steel Complex’s DRI plant was the second producer to utilize PERED, which came on stream on October 15, 2017. The plant has an annual sponge iron production capacity of 800,000 tons with content reaching 95% purity, according to Iranian Mines and Mining Industries Development and Renovation Organization.
The DRI plant of Neyriz Ghadir Steel Company was inaugurated in January 2018. Located in Fars Province, Neyriz steel company's construction started in 2010. Ghadir Investment Company is the project’s main investor and owns a 65% stake in the Neyriz plant, with IMIDRO controlling the rest. The plant is capable of producing 800,000 tons of sponge iron per year.
Aziztaemeh also said Omani and Indian companies have expressed interest in importing the Iranian technology.
World's Second Largest DRI Producer
The World Steel Association’s latest report shows Iran is the world’s second biggest producer of direct reduced iron after India.
A total of 12.18 million tons of DRI were produced in Iran during the first five months of 2021 to register a 1.6% decline compared with the corresponding period of 2020, the latest report released by the World Steel Association shows.
The country has remained the second biggest DRI producer in the world, after its primary rival, India, which produced a total of 16.27 million tons (up 40% year-on-year) during the period under review, according to the Brussels-based international trade body for the iron and steel industry.
The world’s total DRI output in the first five months of 2021 stood at 42.84 million tons to witness a 16.3% growth YOY.
Other major DRI producers in the world were Saudi Arabia with 2.6 million tons (up 21.1% YOY), Mexico with 2.4 million tons (up 23% YOY), Egypt with 2.1 tons (down 4.2% YOY), the UAE with 1.6 million tons (up 25.8% YOY), Canada with 747,000 tons (up 52.8% YOY), Libya with 321,000 tons (up 41.1% YOY), Argentina with 552,000 tons (up 132.7% YOY), Qatar with 314,000 tons (down 28.9% YOY), Venezuela with 148,000 tons (up 1% YOY) and South Africa with 91,000 tons (up 152.4% YOY).
Mobarakeh Steel Company, located in Isfahan Province, is Iran's biggest producer of sponge iron. MSC is the biggest steel producer in Iran and the wider Middle East and North Africa region.
