The direct reduction plant with its state-of-the-art technology will provide the Austrian steel production sites in Linz and Donawitz with access to cost-effective and environmentally-friendly HBI, thus ensuring their competitiveness in the long term. The property covers an area of two square kilometers, is situated in a strategically advantageous position on Corpus Christi Bay, and has direct deep-sea access to the Gulf of Mexico.
The MIDREX facility will produce high-quality HBI (“sponge iron”) from iron ore pellets, which is comparable to the highest quality scrap or pig iron and is therefore an excellent pre-material for the manufacture of crude steel. In contrast to using purely coke-based blast furnaces, the planned direct reduction plant will only use natural gas, which is much more environmentally friendly, as the reducing agent. The use of natural gas in the reduction process will help to significantly improve the carbon footprint of the voestalpine Group and will be an important step in the achievement of the Group’s ambitious internal energy efficiency and climate protection objectives. The price of natural gas in the USA is about one quarter of the price in Europe. Around half of the planned two million tons of HBI will be supplied to the Austrian steel plants in Linz and Donawitz. The other half will be sold to partners interested in a supply over the long term.
voestalpine already announced in May of this year that it has signed a memorandum of understanding with the first of these partners regarding the sale of HBI. Starting in 2016, Altos Hornos de Mexico (AHMSA), a Mexican manufacturer of premium steel, will purchase several hundred thousand tons of high-quality HBI annually from the new voestalpine site. Negotiations are underway with numerous other interested parties, and some negotiations have already entered an advanced stage.