Clever way to control costs by mixing it up
Indiana Harbor faces challenges unlike other plants in the ArcelorMittal family. Built as two, side-by-side competing mills, they are separated internally by the Indiana Harbor ship canal. Outside, roads connecting the two sides run through business, industry and residential areas.
With duplicate lines, different raw material contracts, logistical issues and two unions, Indiana Harbor has challenges that make operating as one entity difficult. Regardless, it is expected to run as one mill, taking advantage of synergies when possible. Employees routinely come up with innovative ideas to overcome hurdles.
It’s no surprise that the team at Indiana Harbor overcame restrictive elements of multiple iron ore contracts and successfully devised a plan to reduce spending. And they did it while adhering to the rules of the contracts.
“Legacy contracts won’t allow us to move pellets from one side of the plant to another,” explains Vishwaprakash Hegde, division manager, iron operating technology, ArcelorMittal Indiana Harbor. “Even when the business cycle is down, like it has been the last two years, we have no choice but to take pellets according to the contract. If we don’t take them, we pay anyway.”
Since the sinter plant closed on the west side in 2008, the west side furnaces have not consumed sinter. “One of the challenges we had was how to get the sinter into the furnace,” explains Mathew Collins, No. 3 & 4 blast furnace raw material manager, pictured above. “We couldn’t use the sinter plant conveyors because they have been idled for so long, the repairs to bring them back into working order would have been expensive. So we devised a few other methods that have been successful.”
As a result, surplus pellets were building up at No. 7 blast furnace. It was a cash bleed. So, to maximize savings in iron operations, engineers devised a plan to reduce pellet purchase on the west side and replace them with alternative materials. An analysis of all available iron replacement units identified sinter, scrap, waste oxides and metallic fines as alternatives.
“We can’t move pellets, but we can move other materials from side to side,” says Hegde. “The pellet contract on the west side did allow for reduced amounts, so the purchasing department was able to cut back on the dollars being spent.”
The mix changed at No. 7 blast furnace to more pellets and less alternative iron material, including sinter. Engineers developed a plan to move sinter allocated to No. 7 blast furnace to No. 4 blast furnace on the west side.
Sinter breaks down easily and is difficult to transfer. In anticipation of moving a hundred truckloads per day, the sinter recipe was changed to improve its strength.
“The drive to move the sinter was about thirteen miles from the east to west side,” says Hegde. “It was no small task, this is a very large place.”
Changes were made to the material handling system as well. In addition, scrap was transported between the two sides and also brought in from the Riverdale plant.
“We did see a slight change in hot metal chemistry,” notes Hegde. “But the steel shops made adjustments, and it has not affected steel quality.”
"Our employees are constantly challenged, and they come up with solutions to conserve cash. It’s remarkable."
– Wendell Carter, VP and general manager, ArcelorMittal Indiana Harbor
The project has had a huge positive financial impact for Indiana Harbor. Cooperation – from personnel at both blast furnaces, sinter plant, operating technology, steel shops, purchasing and trucking contractors – was vital to the success.
The initiative began in mid-March, 2015 and saved $24.8 million that year. The pellet purchase dropped nearly 369,000 tons. In just two months this year, Indiana Harbor has saved $7 million, with 98,000 tons reduced.
“This is the type of innovative thinking that’s required when you work at Indiana Harbor,” says Wendell Carter, vice president and general manager, ArcelorMittal Indiana Harbor. “Our employees are constantly challenged, and they come up with solutions to conserve cash. It’s remarkable.”
Substituting pellets was so successful at the west side blast furnace, the practice is now used on the east side at No. 7 blast furnace. When demand goes up, rather than increase the pellet order, substitutions will be made to conserve cash.
Content contributed by Vishwaprakash Hegde, division manager, iron operating technology at Indiana Harbor.
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