GOKOR – cast iron instead of war.

Kryvy Rih mining and processing plant of oxidized ores was always short of luck.

At first they were late to finish construction in time. For long time nobody cared about it but then suddenly many wanted it which is also bed.
The body of unpiped plant has been epidemically stretched in all directions. The name GOKOR became popular again…
At present, analysts are attentively observing the battle between Vadim Novinsky (together with Alisher Usmanov) and Metal Steel with support group  from ISD, MMK Ilich and so on.
Both parties have enough strength and energy. However while vigorous tug of war game it was somehow forgotten that it is not corporate but industrial object…
There is absolutely nothing changed for better during two years – on the contrary the equipment is being stolen and to complete the construction more money is required…along with Dolinskoe town created for its maintenance service that is going to face another harsh winter.
Nevertheless some changes have taken place in October. Particularly Presidents of Ukraine and Romania had the meeting being main countries participants of GOK construction. For the first time Romania has agreed to receive its share in form of money along with discount. There is still long and complicated way to its approval. However, the progress is obvious. Under the direction of president of Ukraine the working group has been formed that should study the situation and develop the recommendations.
Basically, there are three main options – direct implementation of Evkhanurov administration solution on creating JV (Joint venture) together with Ukrainian ore and mining company (URMK), (Novinsky and Usmanov)… This option is facing severe opposition and is hardest to accomplish. Second one is more compromising and implies owner’s structure alteration of URMK – other participant will be included as well.
And the third option implies returning to the former situation and selling GOK at the tender. Although it definitely involves opposition of URMK.
So there are no easy ways – but it is not worth delaying it as well…the plant should be operating. It includes tax incomes and thousands of high paying work   positions in not very rich region of Ukraine.  
All the more there is actual possibility to significantly increase its work performance. Last week discussions about GOK were not the results of scandal as used to be during past two years but were related to its future perspectives…
On the 12 November 2007 president of Ukraine had a meeting with representatives of Japanese company Kobe Steel Ltd and Austrian company Hares Group (with its owner Yuseff Hares).
President was informed about innovative technology of so called “direct reduction iron” Iron making Technology Mark Three (ITmk3R). This is the technology to be applied at GOKOR for pellets processing and high economic performances. The products of this technology is not pellets being used in blast furnaces for processing but more expansive metallized pellets or simpler granulated pig iron suitable for the use in steelmaking units.
President paid attention to the project and confirmed interest of Ukraine in completion of GOKOR with application of highly effective technology of competitive high quality production.
He suggested the working group of experts of Secretariat of President, Ukrmet Association, leading mining and processing enterprises of the region that are studying the question of effective solution to complete the construction to present relative propositions in the shortest terms.
The question is not only about GOKOR  -- the process is quiet interesting for other GOKs and iron plants. At relatively small area around 6 hectares it is possible to create the plant that produces half of the million tons of cast iron per year…
Technology was positively evaluated by representatives of Ukrmet Association. Its vice-president Sergei Grishenko commented on future perspectives:
«GOKOR was designed a quarter of century ago and design diagram of beneficiation of oxidized ores in magnetic technology implies production of concentrates with Fe 61%. From this concentrate production of pellets containing 58.7 % of iron is possible. It is worse than quality Brazilian ore and does not meet modern requirement for the pellets….It means we are losing both in the cost and in compatibility.
Confirmation of new technological diagram of GOK operation is necessary. Fortunately there are groundwork and technologies. We want to review beneficiation diagram of oxidized raw material to increase iron content in the product. Combinatory beneficiation diagrams of oxidized raw material such as magnetic flotation diagram of flotation beneficiation. It will increase iron content in concentrate up to 66-67 % level to be like in Europe.
Suggested direct iron reduction diagram is also interesting. Developed in 2005 concept of completion of Kryvy Rih GOKOR we have noted practicability of further increasing of technological cycle through production organization of metallized iron ore pellets. It is finished cast iron containing 96-98 % of iron which means 300 dollars instead of 60 like in pellets. One more positive feature of this technology is rapid decrease in foreign gas consumption and possibility to use standard types of the coal. Direct reduction project is not that small at the end – but usually they suggest high consumption of natural gas. There are almost no gas here being an advantage that differs it from other direct reduction projects. Besides, it is ecologically much cleaner production.
Experts from Japanese company KOBE had several meetings with our metallurgists demonstrating the effectiveness of the process. They have already research plant operating and two other being built in States. They are interested in this project and are ready to insure risks.
The advantage is that this technology does not require brand new equipment and could be duplicated. Significant number of equipment could be produced in Ukraine.
Hares Group has legal rights to use this technology on the territory of CIS countries. To produce necessary equipment it is creating joint venture with Dneprotiazmash (former Dnerpopetrovsk plant of iron making equipment).
The share of Ukraine equipment at first module will be 30 % and then proportion will grow - commented Grishenko.
Experts point out possible replacement of steel scrap in production as another advantage. The time is over when there was plenty of it. EU Based on estimation of Ministry of Industrial Policy in 2004 the amount of iron scrap reached 9.4 million tons, now it is around seven and by 2012 because of introduction of new projects and increase in the steel production up to 50 million tons the shortage of steel scrap is anticipated to be around up to 1.5 million tons and it will continue to grow... direct reduction iron products will be useful here.
According to estimations the process is going to be profitable. Cost value of one ton of product is around 170 dollars the selling price is over 300. The cost of the unit producing half million tons is expected to be around 160-180 million dollars. Terms of construction are six month. Total payback of the project is up to five years which is twice as better than average terms. Currently Hares Group is involved in attracting the investments.  
To conduct evaluation famous international consulting company Hatch Canada was invited that have given positive conclusion. For Ukraine one of the advantages of the process is full independence from foreign raw material and chance to involve low grade ores reserves. For GOKOR it is possibility to achieve payback much sooner. By the way, based on produced heat in the process the production of electric power could be organized. As was stated before the process was favored by the President. There are negotiations with industrial groups. According to managing director of Hares Engineering (with license of….) Razaz Yunes there are actual projects according to protocols with Metinvest. Perspectives of this project are not bed.