OREANDA-NEWS. METALLOINVEST (the “Company”), announced that it has signed a contract with a consortium of companies comprising Siemens VAI Metals Technologies GmbH (Austria) and Midrex Technologies, Inc. (USA), to build a third hot briquetted iron (HBI) production facility (HBI-3) at Lebedinsky GOK (“LGOK”) in Gubkin (Belgorod region, Russia). The new plant, which will have a production capacity of 1.8 million tonnes of HBI per year, will be the largest HBI module in the world.

Within the framework of the contract, Siemens VAI and Midrex will be responsible for the design, production and installation of equipment, as well as for level 1 and 2 automation. The MIDREX® direct reduction process was chosen in 2005 during the development of the second HBI plant at LGOK, HBI-2, which was launched in 2007. The plant currently runs at full capacity and produces more than 1.4 million tonnes of HBI per year. By leveraging the experience from HBI-2, METALLOINVEST has decided to use MIDREX® technology for the expansion of HBI production and the construction of a new third production module.

With the increased production, METALLOINVEST is responding to the growing demand for hot briquetted iron in Russia, Europe, Asia and the Middle East. Eduard Potapov, CEO of Management Company METALLOINVEST, commented: “HBI production growth is one of the top priorities of METALLOINVEST’s development strategy. We have already completed the project documentation for the development of HBI-3. Total investment in the project will amount to approximately USD 850 million. Construction of the new plant will enable the Company to strengthen its position on the global market of high value-added iron ore products. While HBI accounted for only 7% of the Company’s in 2011, this is expected to rise to 12% after the modernisation of existing production facilities and the introduction of the new module.”

HBI contains more than 90% iron, maintains its chemical structure, has a metallisation degree of over 93%, and a density exceeding 5.0 g/cm3, making it ideal for the production of steel in electric-arc furnaces and converters. HBI produced at LGOK contains almost no phosphorus or sulphur, which reflects the high quality of the steel from the production process. Given the low composition of these elements, the briquettes are well suited for transport by rail or sea. The energy efficiency of HBI production is twice the level of pig iron, which gives HBI significant competitive advantages. Above all, HBI is a more environmentally friendly product, as greenhouse gas emissions from its production are almost twice as low as the traditional blast furnace method.