Hyundai Steel will build a pilot facility for manufacturing direct reduced iron (DRI) at its Dangjin Steelworks in South Chungcheong Province. DRI is iron produced in solid state without melting iron ore. Hyundai Steel plans to use the pilot facility to test various processes for DRI production and apply them to the construction of a steel mill in the United States.
According to the steel industry on the 5th, Hyundai Steel recently began construction of a DRI pilot facility at the Dangjin Steelworks. The facility is being built to produce 30 kilograms of molten iron per hour. Hyundai Steel plans to operate the pilot facility next year to start producing steel products and, based on that, proceed with preparations to operate a steel mill in Louisiana in the United States.
DRI manufacturing refers to a method of producing iron by removing oxygen from solid iron ore using natural gas or hydrogen. It can produce iron with high purity comparable to that from a blast furnace while sharply cutting carbon emissions. It also has the advantage of requiring less investment expense than blast furnace production.
Hyundai Steel is building the pilot facility at the Dangjin Steelworks because a hydrogen plant has been operating there since 2016. Hyundai Steel's Dangjin hydrogen plant produces hydrogen with higher purity (99.999%) than hydrogen produced by other hydrogen plants (99.99%). Hyundai Steel plans to use this to test a hydrogen-based direct reduction steelmaking method.
The Louisiana steel mill, which breaks ground this year, will also produce iron using the DRI method. The site is the world's first electric-furnace integrated steel mill, which Hyundai Steel is building with $5.8 billion (about 8.548 trillion won). The Louisiana mill will produce 2.7 million tons of steel products annually, supplying local automakers including Hyundai Motor, Kia, Ford and General Motors (GM).
At the Louisiana mill, Hyundai Steel plans to build a large facility 100 meters high to react iron ore pellets (pellet, iron ore powder compressed into round shapes and fired) with reducing agents to make DRI. Compared with the blast furnace process that produces reduced iron using carbon monoxide generated by heating coke, carbon emissions are up to 70% lower.
The pilot facility to be established in Dangjin is one one-hundredth the size of the equipment to be installed at the U.S. mill. Hyundai Steel plans to use it to accumulate various data, such as the expense of feeding reducing agents for DRI production and methods for capturing exhaust gases. By leveraging this, the company aims to bring forward as much as possible the timing for stable operation of the Louisiana mill and produce high-quality automotive steel sheets.
Last year, Hyundai Steel doubled the size of its North America business division, which will oversee construction of the Louisiana mill, compared with before. It also expanded staff in its low-carbon technology office to advance hydrogen reduction technology.
A Hyundai Steel official said, "We decided to build a pilot facility at the Dangjin Steelworks with the aim of securing first-phase technology for DRI production at the Louisiana mill and establishing manufacturing standards." The official added, "Our goal is to identify potential issues before operating large-scale equipment, prepare response measures and stabilize the Louisiana mill as quickly as possible."