Ecolant starts construction of a direct reduction electric arc furnace steel plant

Ecolant, owned by OMK owner Anatoly Sedykh, a Russian manufacturer of steel pipes and railroad wheels, told S&P Global Platts that it has laid the groundwork for the construction of a 1.8 million tonne-per-year direct reduction electric steel plant in Vyksa at a cost of RUB 150 billion (2 billion US dollars). Nizhny Novgorod region, central part of Russia.

The design, manufacture and installation of the main technological equipment is carried out by the Italian and Austrian engineering companies Danieli and Primetals.

Steel production in the amount of 1.8 million tons per year will be provided by DRI's own production in the amount of 2.5 million tons per year.

For the production of its own electricity, direct reduced iron and steel, after commissioning in 2025, the plant will receive 3.5 million tons per year of domestic pellets of the DR brand and natural gas, which are plentiful in Russia. It may later be adapted to use hydrogen.

100 objects

In total, Ecolant will build 100 facilities related to eight technology areas: direct reduction production, steel smelting, air separation, water treatment, lime roasting, by-product processing, rail and road logistics, and energy supply.

The main lines will be based on Energiron, an innovative HYL DR technology developed jointly by the Argentinean engineering company Techint and Danieli from Italy. It boasts one of the lowest CO2 emissions and generates 24 MW.

Units will start arriving this year and the last units will be received in 2023 for the plant to be up and running in 2025.

Two continuous casting machines will be installed in the melting shop: one for slabs, the other for round billets and blooms. The ratio of semi-finished products in the mix will depend on the needs of their main buyer, the Vyksa Metallurgical Plant (VMZ), owned by OMK, also located in Vyksa.

VMZ is the main consumer

VSW manufactures a variety of products both from its own steel and from slabs and blooms from outside, and from 2022, when it commissions a seamless pipe plant with a capacity of 500,000 tons per year, it will also need pipe billets.

To use its heavy plate capacity, OMK relies on slab supplies from NLMK's Novolipetsk Iron and Steel Works, while Ural Steel, which is part of Metalloinvest, provides railroad wheel manufacturing processes.

In 2020, OMK produced 1.25 million tons of steel, and the EAF electric arc furnace is operating at full capacity. Its finished products, consisting of welded pipes, railway wheels, thick plates, springs, pipeline fittings and steel structures, are estimated at 2 million tons. Third-party steel covered 40% of OMK's raw material needs.

From the end of 2022-2023, when the newly built OCTG plant reaches its design capacity, OMK will need to purchase 500,000 tons more steel, from 1.3 to 1.5 million tons per year, depending on its production program.

With Ecolant Online, the company must become completely self-sufficient in steel raw materials.

With its commissioning, Russian metallurgy will gain a competitive advantage and move towards decarbonization. The plant's low-carbon steel is designed to help end users achieve their own climate-related goals, Sedykh said.

A number of Russian industries, including transport and energy, will benefit from the purchase of rolled products from Ecolant steel, since its production is fully consistent even with the global green agenda, Ecolant and the owner of OMK believe.