Coal exports in jeopardy?

Canada’s exports of metallurgical coal to Japan, a key industry in Western Canada, could be in jeopardy by the start of the 21st century. According to a paper at the Globe ’90 environmental conference held recently in Vancouver. The paper given by Minoru Hashimoto, managing director of the Japanese steel company, NKK Corp., cited technological changes in steel-making technology as the reason for the prediction.

The technology involves using thermal coal instead of metallurgical coal in the steel-making process. The new process uses a charge of finely ground iron ore and pulverized thermal coal fed directly into the smelting furnace. This eliminates the need for the coking plant, the sintering furnace, and the blast furnace.

Currently the most common method of steel making involves the conversion of metallurgical coal into coke in a coking plant where the coal is heated to very high temperatures in the absence of oxygen, resulting in a product containing 90% carbon.

This coke is then mixed with limestone and iron ore (iron oxide) in the blast furnace where the burning coke produces carbon monoxide gas which, in turn, reduces the iron oxide to elemental iron, the oxygen component combining with the carbon monoxide to produce carbon dioxide.

This furnace would be eliminated in the new process since the reduction of the iron ore will take place in the smelting furnace.

The sintering furnace, where iron ore fines are agglomerated prior to addition to the blast furnace, will also be eliminated since the new process uses a ground feed.

NKK plans to build, in concert with the Japanese steel industry, a 500-ton-per-day pilot plant at the company’s Ohgishima Works this year. A test run at the plant is expected by 1993 or 1994 with a target to bring on the new process on a commercial scale set for the year 2000.

The target of the year 2000 relates to the life of most of the coke ovens in Japan as well as the blast furnaces, many of which will require re-lining by that date.

Hashimoto noted that the relative strength in the value of the yen over the past decade coupled with a lacklustre steel market has caused the Japanese steel industry to look at changing its structure to increase competitiveness.

The restructuring took the form of shutting down of a number of blast furnaces, laying off about 40,000 workers or about 30% of the steel industry employees, and an expansion into non-steel business areas.

Canada exported about 19 million tons of metallurgical coal to Japan last year, worth in excess of $1 billion.