scrap mgt _ optimization solutions

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Scrap Management &

OptimizationSolutions

ScrapMaster is a trademark of Harsco Corporation. All rights reserved.

BOSS is a trademark of Management Science Associates, Inc. All rights reserved.This presentation is intended for customers of Harsco Corporation. All information included in this presentation, including copyright and trademarks, is expressly reserved

and no part of these materials may be reproduced or distributed outside of the customers organization in any form without Harscos prior written consent.


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1

Ethical in Thought, Word and Deed

Disciplined Thought, DisciplinedAction and Disciplined People

Transparency

Safety

Personal Accountability and

Responsibility

Customers

Targeted Market

BHAG

Envisioned Future

Value Creation

Value Capture

Value Selling

Be the Best

SustainableSuperior

Performance(20-Mile March)

Customers

Employees

Shareholders

Suppliers

Uncompromising Integrity andEthical Business Practices

Harsco Integrity Framework: Code of Conduct

Safety Practices

Internal Control

To build teams that win with integrityanywhere in the world

Harsco's Core Ideology

Core Values

People the "A Team" Human Capital Framework:

Global Talent Management System for Recruiting,

Developing, Retaining and Assessing Human Capital

Continuous Improvement Continuous Improvement

Discipline through Lean and SixSigma Methods

Business Transformation

Value Creation Discipline Economic Value Added (EVA)

Value Selling Culture

3

2 4

Security Practices

Global Management Practices

Core Purpose


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Scrap consumption in Steelmaking

Global Steel production in 2009 totalled1.2 billion tonnes, using approx 600million tonnes of scrap

The value of that scrap amounts toapprox $140 billion*

As the worlds largest steel producerChina consumes more scrap insteelmaking than any other country

550 million tonnes LST in 2009

170 million tonnes scrapconsumption in 2009

*Based upon 2009 average scrap price of $230 per tonne

0 50 100 150 200 250 300 350 400 450 500

Oceania

S. Am

CIS

M.E. Africa

India

China

Rest of Asia

N. Am

Europe

Steel Production (million tonnes)

EAF

BOS

0

20

40

60

80

100

120

140

160

China Europe Rest of

Asia

N. Am India CIS S. Am M.E. Africa Oceania

ScrapUsed(m

illiontonne

EAF

BOS

Steelmaking Scrap Consumption 2009

Crude Steel Production 2009


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Scrap is the most significant raw material cost

70% of steelmaking costs areraw materials

Scrap makes up a largeproportion of this

$374 million/year 1 million tonne EAF plant

Estimated Scrap input cost

$204 million/year 3 million tonne BOS plant

*Based upon average scrap price of $340 per tonne


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Best Practice scrap management

Best-in-Class scrap management

allows the Steelmaker to:

Downgrade/reject merchant

scrap loads

Reduce scrap yard landfill

costs

Minimise scrap stocks

Optimize scrap charges


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Through Processes Impact

Consequences of poor scrap management:

=> EAF delays waiting for scrap

=> Incorrect weights charged

=> Low yields

=> Increased slag volumes

=> Missed specifications

=> Increased refractory wear

=> Greater flux, O2, power consumption

Financial impact:

1 minutes lost production time approx $3000 10oC Cooling requirement approx $440 per heat

+100 ppm [O] at tap approx $51 per heat


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Harsco Metals Scrap Management Solutions

Optimum scrap mix is charged each and every time on time the correct weight, the correct quality, zero delays

Full inspection, including state of the art radiation detection for all purchased scrap

Proactive reporting of scrap deliveries to enable cash recovery associated with OOS loads, rejected loads and

contaminated loads

Real time IT control for internal and purchased scrap with full stock tracking and reporting system

Full traceability and accountability of scrap throughout site so that potential for fraud can be eliminated


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ScrapMaster

Four integrated operating modules for cost-effective management of the entire scrap supply chain,with full segregation and traceability.

ScrapMaster

Management information reporting puts you in control

Optimizing

Scrap handling

Basket Loading

Incomingscrap

Powered by


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ScrapMaster Value

ScrapMaster can unlock significant savings

Save on external scrap purchasing

Realise the maximum value of internal scrap

Charge the optimum scrap mix on time, every time

Monitor the entire scrap charge history

The unique video review function in ScrapMasterallows the furnace manager to monitor exactly whatscrap was loaded at what time, in case of anyproblem with a particular heat.


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Scrap Optimization

ScrapMaster now integrates BOSS (Blending OptimizationSoftware Suite) functionality

Under license from Management Science Associates, Inc.

World leading optimization program

Yield-based cost calculation

Actual scrap cost per tonne of steel

Value of the scrap inventory on a real-time basis

Minimises scrap charge cost, grade by grade Based on specific grade production data entered by the

steelmaker

planned tonnage, scrap composition, prices, availabilityand inventory


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BOSS References

Essar Steel Algoma Canada Integrated

ArcelorMittal PST USA EAF

AK Steel USA Stainless Steel

ATI USA Stainless Steel

Carpenter Technology USA EAF

Universal Stainless USA Stainless Steel

MetalTek International USA Special Steels

McConway Torley USA Special products

Sparrows Point Scrap Processing USA Integrated

The Federal Metal Co USA Special products

Waukesha Foundry USA Special products

WCI Steel USA Integrated


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BOSS Functions

Single heat optimization

Multi heat optimization

Campaign optimization

Scrap buy planning

Inventory management Results feedback and interpretation


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Optimization Process Flow

Element Recovery

Restrictions

STAGE 1Input Scrap Grade Data

STAGE 2Input Steel Grade Data

STAGE 3Optimized Charge Design

Restrictions

Chemical Analysis

Steel Grade Name

Scrap Grade NameScrap Grade Name

Scrap Type

Chemical Analysis

Physical Properties

Yield

Cost Information


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Scrap Input Data


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Steel Grade Data


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Inventory Data


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Optimized Charge Solution


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Solution Information


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Scrap Buying Plan


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Factors for Optimization Accuracy

Input scrap analysis is critical

Regular melt tests and spectrographic analysisof scrap required to build database

Update model as more and more information isgathered

Furnace characteristics to be established Full partnership approach needed so that details

of furnace characteristics and production planare shared

Factors for Optimized Operations

Accurate recording of scrap charge weight

Use ScrapMaster system to ensure scrap chargeweights are recorded heat by heat

Exact Knowledge of scrap being charged

Use ScrapMaster DGPS system to ensure fulltracking of scrap charge

Clear demonstration of optimization impact

Compare actual scrap charge recipe, weight andcost heat by heat and day by day with optimized

solution

Successful Optimizing


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Scrap Analysis

Accurate chemical analysis data is required for scrap materials

Need to begin population of scrap database

To start process, need melt tests of each scrap

Ongoing testing of scrap will be required to populate database with a large number of samples to improve modelaccuracy

Spectrographic AnalysisOf Scrap

Melt Test of Scrap

Update scrap analysisdatabase

Load datainto optimization model

Incoming scrap type

Repeat analysis regularly to build database

and improve model accuracy


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7

ConfirmResults

3Update Scrap

Analysis

4

MeltingEAF

5

Results(history)

6

AnalysisScrap vs Steel

(residuals)

8

FeedbackData

1

ReceiveScrap 2

AnalyseChemical

Data

Continuous Feedback

Process Improvement

Optimization Improvement


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Optimized Savings Example

Analysis of existing scrapcharge practice is made andthen compared with optimizedsolution

Total cost of both areestablished and savingscalculated

Grade Name# ofhts

%Savings per

month

1424 Plate HIC 66 2.09%

1674 Plate Linepipe 27 0.86%

1988 Plate LowAlloy 126 3.99%

1412 Plate MicroAlloy 82 2.60%

1981 Plate MildSteel 623 19.75%

1608 Section LowAlloy 22 0.70%

1639 Section MicroAlloy 760 24.10% 77,210

1655 Section Mild Steel 120 3.80% 34,867

1962 Strip HIC 96 3.04%

1451 Strip High Carbon 188 5.96%

40 Strip IF 458 14.52%

1932 Strip Linepipe 35 1.11%

1437 Strip Low C 277 8.78% 32,863

1915 Strip Low S Ca 35 1.11%

1449 Strip Med C 239 7.58% 27,755

3,154 100.00% 172,695

Grade Name# ofhts

%Savings per

month

1424 Plate HIC 66 2.09%

1674 Plate Linepipe 27 0.86%

1988 Plate LowAlloy 126 3.99%

1412 Plate MicroAlloy 82 2.60%

1981 Plate MildSteel 623 19.75%

1608 Section LowAlloy 22 0.70%

1639 Section MicroAlloy 760 24.10% 77,210

1655 Section Mild Steel 120 3.80% 34,867

1962 Strip HIC 96 3.04%

1451 Strip High Carbon 188 5.96%

40 Strip IF 458 14.52%

1932 Strip Linepipe 35 1.11%

1437 Strip Low C 277 8.78% 32,863

1915 Strip Low S Ca 35 1.11%

1449 Strip Med C 239 7.58% 27,755

3,154 100.00% 172,695


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The Value of Charge Optimization

Quantifying the cost of production constraints (e.g.sulfur composition of the heat)

Lowest cost liquid steelmaking

Optimized use of scrap available

Use data for informed scrap purchasing andnegotiation

Planned scrap buy

Full control of scrap cost

Tangible savings


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End-to-End Scrap Management Solution

Full management of scrap from the moment it arrives on site until it ismelted

Handling of scrap arriving by road, rail and barge

Order receipt, radioactivity control, scrap quality control Processing of scrap on site

Collection, transport and upgrading of all internally arising scrap

Reception, storage and real time scrap inventory control

Scrap charge optimization

Loading scrap baskets according to menus received electronicallyfrom the production schedule

Transport scrap to the furnace on specialist vehicles

scrap mgt _ optimization solutions

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