Cleveland-Cliffs government funds to go in part toward DRI

Two Cleveland-Cliffs projects designed to accelerate decarbonization have been selected for funding of up to $575 million from the U.S. Department of Energy (DOE).

The projects entail considerable electrification of its melt shop capacity and turning away from the use of coke and coal in favor of direct reduced iron (DRI) and other iron units sometimes referred to as scrap alternatives.

Rather than increasing the use of recycled ferrous scrap, the Cleveland-based mining and steelmaking firm says one furnace modification avoids the use of significant amounts of prime scrap metal while allowing it to maintain the level of quality of the steel produced, which would otherwise be degraded with increased scrap usage.

Cleveland-Cliffs is making the moves despite its ownership of Detroit-based Ferrous Processing & Trading Co., which it described in 2021 as among the largest processors and distributors of prime ferrous scrap in the United States, representing approximately 15 percent of the domestic merchant prime scrap market.

One of the planned DOE-funded investments will be made at the Cliffs integrated steelmaking complex in Middletown, Ohio, while the other involves new equipment at its Butler, Pennsylvania, electric arc furnace (EAF) mill.

The larger project by far is in Middletown, where Cliffs intends to replace its existing blast furnace with a 2.5 million tons per year “hydrogen-ready” (or natural-gas powered) DRI plant and two 120-megawatt (MW) electric melting furnaces (EMFs) to feed molten iron to the existing infrastructure already on-site, including the basic oxygen furnace (BOF), caster, hot strip mill and various finishing facilities.

The Middletown complex will maintain its existing raw steel production capacity of approximately 3 million net tons per year while no longer using coke for iron production.

“The EMF technology is well established and, together with the injection of hydrogen in blast furnaces, is a preferred route for meaningful reduction in carbon emissions for integrated steelmakers worldwide,” Cleveland-Cliffs says.

The company says the process will dramatically reduce carbon emissions intensity at the Middletown facility and turn it into the "most advanced, lowest greenhouse gas- [GHG-] emitting integrated iron and steel facility in the world.”

“The new configuration also avoids the use of significant amounts of prime scrap metal, which Cliffs anticipates will become shorter in supply and higher in cost throughout the rest of the decade," Cliffs adds. "The process will also allow Cliffs to maintain the level of quality of the steel produced, which would otherwise be degraded with increased scrap usage, maintaining the company’s leading position in the automotive end market.”

While the DOE is providing funding, the net capital outlay for Cliffs will be approximately $1.3 billion.

In Pennsylvania, induction reheat furnaces to be installed at the Butler EAF mill will be funded in part by a $75 million DOE grant.

Cliffs intends to replace two of its existing natural-gas fired high-temperature slab reheat furnaces in Butler with four electrified induction slab reheat furnaces to bring optimum efficiency to its production of electrical steels, a critical component of the electrification of America and the greening of the electrical grid.

The company does not indicate whether melting slabs in Butler will reduce the amount of scrap fed into the EAF mill, but says, “The primary benefits of this project are lower carbon emissions, substantially reduced energy costs and improvements in slab quality.”

“Completion of our $1 billion clean hydrogen-ready Toledo DR plant through the depths of COVID stood as strong evidence of Cliffs’ expertise and resolve to drive down emissions,” Cliffs President and CEO Lourenco Goncalves says.

“This federal funding is being made available through DOE’s Industrial Demonstrations Program funded through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.”