Экономические науки/9. Экономика промышленности

A. Chernyavs’kyy

Department of special constructions of DPSK Ltd.

Economic potential of PCI technology in blast furnace production

Due to rise in the price of natural gas (mostly imported from Russia and Turkmenistan) managers of Ukraine’s metallurgical works are trying to find new solutions to reduce production prime cost and to utilize natural resources of Ukraine. Using pulverized coal instead of natural gas in blast furnace production is supposed to be the only way to get independence of energy carriers import.

Metallurgical works of Ukraine will build utilities based on pulverized coal injection (PCI) technology in 2-5 years with gross output about 7.5 million tons. This will entail serious consequences for each metallurgical enterprise taken separately as well as economy of Ukraine as a whole on macrolevel.

At least three problems can present difficulties in research of blast furnace production economics nowadays.

First of all research people must take into account macroeconomic trends of world energy market as the key question that defines the strategy of consumers [1, 8].

Saving rates of technological innovations as well as some technical aspects are supposed to be the second significant issue [4].

The third problem is connected with manufacturing application of pulverized coal injection (PCI) technology on selected metallurgical works [7].

World supply for coal is limited by 250 years of production on current level, but the same value for oil production varies only from 35 to 50 years. Another forcible argument for using pulverized coal in blast furnace production is that assured coal resources in Ukraine come to more than 90% of total country’s power resources.

Fig. 1. World energy consumption

Gas production capacity of Ukraine in last 10 years is about 17-18 milliard cubic meters, but it’s only 15-20% of total gas consumption. Ukraine belongs to one of the world major natural gas importers. The most part of Ukraine’s external debt also consists of natural gas liabilities. The main gas suppliers of Ukraine are Russia and Turkmenistan.

Assured coal resources of Ukraine are from 57 to 100 milliard tons. It will take 300-400 years of consumption on current level to utilize all Ukrainian coal fields. Coal-mining industry of Ukraine consists of 308 technological units including 246 large coal mine enterprises and 7 reserve coal mines. More than 1.2 million people (2.5% of total population) are employed in coal-mining industry.

In the context of “Global strategy of energy saving in Ukraine”, “Conception of fuel and energy complex of Ukraine development” and “National energy program of Ukraine” it is placed high emphasis on development of coal-mining industry.

According to these programs, it is planned to finish structural re-development of branch until 2015. In 2010 Ukrainian coal-miming enterprises will produce about 170 million tons a year instead 81 million tons in 2000. From 46 to 93 coal mines and 16-17 processing factories will be reconstructed until 2015 and about 50 new coal-mining enterprises will be erected in Donets Basin.

Metallurgical industry of Ukraine consumes about 17 million tons of coke a year and uses for this purpose 27-28 million tons of coking coal. After putting into operation new facilities (based on PCI technology) the savings will amount to 6.4-8.32 million tons of coking coal.

Fig. 2. Approximate structure of coal consumption in Ukraine

PCI technology will completely exclude natural gas from cast iron production process and also reduce coke rate by 23%. There will be considerable reduction in carbonic acid atmospheric emission due to new technology.

Erection of utilities based on PCI technology requires sizeable investments. The cost of mentioned utilities exceeds the cost of similar utilities for liquid and gaseous fuel by a factor of 5 or 7. The most part of aggregate investments (about 70%) meets liabilities of construction of pulverized coal preparation and distribution workshops. Creation of large factories specializing on pulverized coal preparation for several metallurgical works can reduce capital inputs on construction.

Efficiency of pulverized coal use is determined by quantity of injected pulverized coal fuel, coke replacement factor, cost of fuel, capital expenditures and maintenance charges of pulverized coal preparation and distribution facilities.

Principal questions of PCI system creation decision-making are as follows [2, 3, 6].

1. What is the maximum possible consumption of pulverized coal for each blast furnace in the nearest time?

2. What is the price of pulverized coal fuel off-the-shelf for blast furnace production?

3. What is the payback period of PCI equipment?

4. Finally, what is the efficiency of using PCI technology?

Table 1

Planned pulverized coal capacity by enterprise

Company name	Capacity, million tons
“Zaporizhstal JSC”	2
“Alchevsk Metallurgical Works”	2
“Mariupol Metallurgical Works”	2
“Yenakiyevo Metallurgical Works”	1.2
“Donetskstal Plant”.	0.3

Using PCI technology on Zaporizhstal JSC can bring considerable financial benefits in the nearest future [5].

It is planned to use PCI systems on 4 blast furnaces of enterprise. Mentioned technology can reduce Zaporizhstal’s consumption of natural gas by 335 million cubic meters a year or almost 100%. The reduction in coke coal consumption will come to 330.6 thousand tones a year or about 23%.

Fig. 3. Cast iron production volume, Zaporizhstal JSC

Investment structure is as follows:

- Zaporizhstal JSC internal funds – 25%;

- special purpose crediting funds given by European financial establishments – 75% (period of loan is 6.5 years).

Financial advantage of using PCI technology will exceed 163 million UAH a year with planned payback period about 3 years.

Further research in the field of blast furnace production economics may include detailed accounts of cast iron production process using enterprise accounting data, process flowsheets etc.

References

[1] Endres A., Kwerner I. (2004) Economics of natural resources. Piter, St. Petersburg.

[2] Fathutdinow R. (2002) Administrative decisions. INFRA-M, Moscow.

[3] Krichewsky M. (2005) Intellectual methods in management. Piter, St. Petersburg.

[4] Kurunow I. (2001) Furnace charge, coke, operation and performance of blast furnaces. Steel. 3: 7-13.

[5] Kuz’menko N., Michailow N. (2003) Zaporozhstal: a symphony of metal. Tandem, Zaporozhye.

[6] Vasilenko O., Shmat’ko V. (2003) Innovative management. CUL, Phoenix, Kyiv.

[7] Yaroshewsky S., Ryabenko A. (1974) Application of powdered coal for cast iron smelting. Technika, Kyiv.

[8] Yatsenko A. Dubyniuk Y. (2005) International markets of resources. CNL, Kyiv.