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Voestalpine picks Texas for 2M-tonne DRI site

Keywords: Tags  Voestalpine, Wolfgang Eder, DRI, HBI, Corpus Christi, San Patricio County, Nucor, catherine ngai

NEW YORK — Austria’s largest steelmaker, Voestalpine Group, has selected Corpus Christi, Texas, for its planned 2-million-tonne-per-year hot-briquetted iron (HBI) and direct-reduced iron (DRI) facility.

"We examined a total of 17 sites in eight countries for this project, the largest foreign investment in the group’s history to date," Wolfgang Eder, chairman of Voestalpine’s management board, said in a statement March 13. "In the end, Texas was the most convincing in terms of all the key criteria, including logistics, energy supply, a well-educated work force and the political environment."

The steelmaker said it is still negotiating with local authorities over a 500-acre site on Corpus Christi Bay in San Patricio County, and it expects to make a final decision on whether to proceed with the project before the summer.

The proposed project, estimated to cost 550 million euros ($711.7 million), also requires permitting approval from federal and state environmental authorities, which is expected to take about 15 months, the Linz, Austria-based company said. If development goes as planned, the plant is expected to be operational by 2016 with around 150 employees.

Voestalpine said the plant will produce both DRI and HBI from iron ore pellets, using natural gas as the reducing agent. Half of the production will be shipped to the parent company’s steel mills in Linz and Donawitz, Austria, while the other half will remain as a "strategic reserve" and initially be sold to partners interested in longer-term contracts.

"In the (United States), we can access energy cost efficiently and operate in a politically stable, predictable environment," Eder said. "This investment also provides the Voestalpine Group an additional growth option in North America over the long term. It would have been impossible to build a comparable plant in the European Union, not least because of a lack of competitiveness in terms of operating costs."

AMM reported in December that the company was eyeing a possible greenfield steel raw materials plant in Texas, with sources close to the project at that time citing Houston as one possible location (, Dec. 17).

Eder suggested this week that one of the reasons behind its decision to locate in Texas was the state’s environmental policies, which may be more industry-friendly than other locations.

"We will ... be investing in the exceptionally strict U.S. environmental and safety standards and applying state-of-the-art processes for reducing emissions of pollutants, noise and dust. This also includes dealing responsibly with the water supply, a scarce resource in Texas," said Eder, noting that while U.S. environmental regulations "are similarly stringent" to those in Europe, "Texas is taking a different route."

The company did not say whether it had plans to eventually build a steel mill in the United States to use the DRI and HBI feed, and a company spokesman did not respond to requests for additional comment.

The investment comes as the company continues its push into North America. Voestalpine announced in August plans to build a $62-million auto body parts manufacturing facility near Cartersville, Ga. (, Aug. 23), while it said in December that a subsidiary had acquired tool and mold steel distributor and processor Sturdell Industries Inc. for an undisclosed sum (, Dec. 10).

Investments in DRI are a growing trend for the steel sector. Charlotte, N.C.-based steelmaker Nucor Corp. is building a 2.5-million-ton-per-year DRI facility in St. James Parish, La., with the option to expand (, Oct. 19), while other companies—including North Star BlueScope Steel LLC (, Aug. 21), Essar Steel Minnesota LLC (, Dec. 19) and OAO Severstal (, Jan. 10, 2012)—are said to be looking into their own possible projects.

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