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NORDIC STEEL & MINING REvIEW • Iron Ore Review • Visionary takes the lead • World’s Hardest Steel • Adam Lundin to Filo Mining • Optical flatness • Graphite Electrodes

2017 #2

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Contents 2017 #2 Volume 201

editorial Publisher Carl Christer Carlson +46(0)76-555 79 53 Chief Editor Anders Ström Art Director Jessica Nyström/Dzign Translation Anglo Rubicon AB Advertising Richard Svensk, +46(0)70-890 05 67 Print Exakta Print, Malmö Customer service/subscriptions Pressdata +46(0)8-799 63 97 Publisher Format Publishing Birger Jarlsgatan 18 114 34 Stockholm Bankgiro 375-4587 ISSN 1284-6448 Format Publishing Titles Affärsplats, Bergsmannen, Easy South, Färg, Möbler & Interiör, Kungens Kurva Magasinet, Nordic Steel & Mining Review, Vin&Bar

4 Iron Ore Review, 2017

Overview of the market changes in iron ore, steel and metal during the year.

10 Visionary backed by the steel industry takes the lead

Interview with Bo-Erik Pers, CEO Swedish Steel Producers’ Association (Jernkontoret) about the vision that the companies will deliver only sociallybeneficial products by 2050.

15 Column by Henric Borgström Recovery – was the word of the day  when World Steel turned 50.

16 Lundin’s heir takes the lead in South America

Interview with Adam Lundin, new CEO for Filo Mining, the Canadian mine- och prospectingcompany within the Lundin Group.

18 Sharpening its services for the mining industry

ÅF, one of Sweden’s largest consultants in the field of mining, launches a new international organization and clarifies its offering to the mining industry.

21 A good year for metal prices

2017 has so far been a mainly positive year for metal prices. Including an overview of price changes and market comments for copper, gold, iron ore, nickel and zink.

25 Swedish company behind world’s hardest steel

3D-produced steel does not need forging or machining to turn it into a finished product. Any shape can be produced. And as a real bonus,  considerably less material is consumed.

27 New developments of optical

flatness measurement in metal production Higher quality demands create market for Shapeline’s laser line triangulation system.

30 Graphite electrodes – a unique

and increasingly valuable tool in steelmaking

Founded in 1817 as Jernkontorets Annaler, Bergsmannen JKA is one of the oldest technical periodicals in the world. Today it is the leading magazine for the Nordic steel and mining industries and the metal and mineral engineering field in general. In addition to our ordinary circulation of Bergsmannen JKA (six issues per year) this special issue in English, Nordic Steel & Mines Review (two issues per year), is being distributed to our ordinary readers, but also to 2,500 key persons in the international steel and mining fields.

Steelmaking with graphite electrodes more  efficient and less expensive than blast  furnace manufacturing.

35 Sandviks intelligent trucks automatise haulage

37 Boosted steel operations in Avesta with UTCAS®

39 Quality Day Scandinavia,

seminar, June 12-13, 2018

40 Jernkontoret Annals

Success for Steel Day 2017. The Swedish Steel Producers’ Association first with certified innovation leader. Report from the seminar “Value creation by digitalization in the metals industry”.

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By Anton Löf & Magnus Ericsson

Iron Ore Review, 2017 Iron ore prices have held up surprisingly well in 2017. The strong US dollar in early 2017 helped many mining companies in countries with weaker currencies to earn additional income. Producers at the high-quality end of the iron ore market further benefitted from large and growing premiums paid for their products.

Steel markets Economic growth strengthened somewhat in China and the developed countries in 2016, and world crude steel production increased by 0.6 percent. This increase in production was an improvement on 2015, when production fell by 3.0 percent. The increase in crude steel production in India was particularly noteworthy, with production rising by 7.4 percent. Chinese crude steel production decreased in 2015 for the first time in decades but in 2016 production increased by 0.6 percent. At 808 Mt, China continues to be, by far, the largest producer of crude steel. Approximately 50 percent of total world crude steel was produced in China in 2016, almost exactly the same as in 2015. According to the OECD, the world’s steelmaking capacity increased from a level of 1,050 Mt to 2,390 Mt between 2000 and 2016, while steel production (according to the World Steel Association) over the same period rose from 848 Mt to 1,620 Mt. This suggests that overcapacity increased from 202 Mt in 2010 to 770 Mt in 2015. This corresponds to a utilization rate of 81 percent in 2000 compared to 68 percent in 2016. Crude steelmaking capacity increased by 30 Mt per year in 2016.


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Global steel exports remained relatively flat in 2016. According to OECD estimates, world exports were 314 Mt, down from 317 Mt. The exports of many countries declined; China by 3.1 percent, Japan by 0.7 percent, the EU by 12 percent and Korea by 1.8 percent. This was partly offset by growth in the CIS region where Russia increased its exports by 5.1 percent and the Ukraine by 2.9 percent. However, Chinese exports still dominated with 34 percent of the world total. While the growth rate in Chinese exports seems to have abated, the total volume is still a source of concern to many other steel producers. The OECD notes that trade measures have increased in the last few years and this could explain the slowdown in the growth of Chinese steel exports during 2016. The steel demand recovery in 2016 also impacted steel prices. The world steel price index, which had trended downwards from 2011, rose sharply in 2016. Further there was a shift in the demand structure, with hot-rolled coil prices increasing at a faster rate than rebar prices. Steel operating costs increased in line with the increases in raw materials prices. However, the rise in steel demand and steel prices more than offset this, and profit margins increased

through 2016 and early 2017. The financial situation for many steelmakers is however still challenging. The industry is less profitable than most other industries.

Iron ore production In 2016, the iron ore market returned to growth following the contraction of 2015, and the global output of iron ore increased by 4.0 percent to 2,096 Mt. Output increased not only in the two most important producing countries Australia and Brazil, but also in India and South Africa where they too increased their production. Australia continued to grow faster than Brazil in 2016, the former growing by 3.8 percent to 842 Mt, and the latter by 2.1 percent to 431 Mt. Asian iron ore production, which peaked in 2007 at 647 Mt, has declined almost every year since then, mainly due to the shrinking output in China and India. In China, output fell by 7.9 percent in 2016 to 114 Mt. The national Chinese production figure for unbeneficiated ores corroborate these figures with a decline of 7.3 percent. In India, the downward trend seems to have turned, with production increasing slightly With Chinese production converted to a standard 62 percent Fe, an estimate based on imports and pig iron production.


in both 2014 and 2015. In 2016, Indian iron ore production grew by 30 percent and reached 185 Mt; an impressive feat by a country which has been plagued by policies hampering growth. Indian iron ore production fell from 224 Mt in 2009 to 136 Mt in 2013, and exports in 2015 were down to 4.2 Mt, well below the 2009 peak of 224 Mt. In Europe, including the CIS, production declined by 0.2 percent in 2016, down to 235 Mt. Unlike the countries with falling production, Sweden and LKAB managed to increase production by 8.5 percent, with LKAB’s pellet products being in high demand. African production increased by 6.2 percent to 87 Mt in 2016. In Africa, the two major producing countries, South Africa and Mauritania, both increased production, the former by 11 percent and the latter by 16 percent. Following the bankruptcy of several new mining companies in Africa, this was indeed good news. During the last few years, with the exceptional increases in production from a number of countries, mainly Australia, and falling production in China and India, the share of iron ore being produced by the developed countries has increased substantially. In 2016, the share of world iron ore output from the developing countries increased from 43.5 percent in 2015 to 44.2 percent in 2016. The recovery of Indian iron ore production was one of the reasons for this trend break. During the three first quarters of 2017, the ‘Big 3’ have together produced some 688 Mt which represents a growth of 1.5 percent year on year.

Iron ore trade The growth in global iron ore trade during the super cycle between 2000–2010 was mainly linked to the growth in the steel sector in China. In more recent years the growth has reflected the changing composition of production, with a considerable increase in Chinese imports as a result of closures of domestic capacity. This reflects the limitations of the low Fe poor quality iron ore within China. However, during 2016, while Chinese iron ore production decreased by 9.8 Mt, crude steel on the other hand only increased by 4.6 Mt with Chinese imports of iron ore increasing by 73 Mt, clearly

an indication that stockpiles were growing. The continued Chinese interest in imported iron ore resulted in a global export increase of 5.2 percent in 2016. World total iron ore exports have almost doubled since 2006 and amounted to 1,513 Mt in 2016, compared to 1,439 Mt in 2015. Australia is by far the largest exporter of iron ore with a market share of 54 percent, and the country has been able to profit most from the mine closures in China. During 2016, its exports continued to increase and reached 814 Mt, up by 5.9 percent. The second largest exporter, Brazil, with a market share of 25 per cent saw a slightly lower growth in exports, up by 2.1 percent to 374 Mt, compared to 2015. South Africa exported 65 Mt of iron ore in 2016 making it the third largest exporter. Canada, ranked 4, and the Ukraine, ranked 5, exported 41 Mt and 37 Mt respectively in 2016. Sweden was the sixth largest exporter and shipped some 23 Mt in 2016. Together, the five most important iron ore exporting countries accounted for 88 percent of total exports in 2016, down marginally from 89 percent in 2015. India, whose exports had dwindled from the 2009 peak of 117 Mt to just over 4 Mt in 2015, reported an increase in exports in 2016 of more than 400 percent and reached 22 Mt. The fall was the result of government policies, which included export taxes on iron ore lumps and fines including railway tariffs that punished producers of iron ore for export, bans or caps on production in the states of Karnataka, Goa and Orissa, and actions against illegal mining. In February 2016, the Indian government cut the country’s iron ore export tariffs and eased restrictions which led to a surge in mining in general and exports in particular. China alone accounted for 69 percent of total imports in 2016, and the country’s imports of iron ore increased by 7.7 percent following the lower increase in growth of 2.0 percent in 2015. With rising imports and falling domestic production, Chinese import dependency reached even further heights and was 90 percent in 2016, up from 89 percent in 2015. In 2017, iron ore shipments for the first 10 months of the year from the Pilbara ports in Western Australia have increased by 4.0 percent compared to the same period last year. Brazilian exports for the period January-September 2017

have increased by 4.6 percent, compared to the same period in 2016. Chinese imports have also followed this pattern and have increased by 4.8 percent during the period January to October 2017. Chinese imports have thus totalled 879 Mt for the first 10 months of 2017, or 1055 Mt on an annualized basis.

Pellets Global production of pellets in 2016 fell sharply to 398 Mt, a decrease of 10 per cent compared to 2015. Exports of pellets also experienced a decrease, falling by 18 percent. The reason was

The steel demand recovery in 2016 also impacted steel prices. The world steel price index, which had trended downwards from 2011, rose sharply. related to the tragic dam failure in Brazil in November 2015. In 2016, the effects of the capacity reduction in Brazil took its toll on the global pellet market with lower production and thus higher pellet prices. The share of pellets in total iron ore production has decreased since the late 1990s when it amounted to about 26 to 27 percent. Over the past few years, however, it has remained fairly constant at 22 to 23 percent (22 percent in 2015). Developments in recent years have underlined the sensitivity of pellet demand to world market conditions and prices. During the financial crisis, pellet demand decreased more than the relatively cheaper feed materials iron ore fines and lump. The closure of Samarco’s production capacity has resulted in the share of total production attributed to pellets shrinking even lower, and in 2016 it was as low as 19 percent.

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Seaborne iron ore trade In 2016, seaborne iron ore trade increased by 5.8 percent to 1,461 Mt. As in earlier years, the increase was entirely due to higher Chinese imports.

Iron ore prices 2016 started off with an iron ore price for the most common standard qualities (as measured by the Platts 62 IODEX index) of around 40 USD/t, the lowest level since benchmark prices were abandoned in 2009/2010. During the early months of 2016, this price improved substantially, rising to almost 70 USD/t in April and reaching a year high in December 2016 of just below 84 USD/t. The average price in 2016 was 58 USD/t. In 2017 the iron ore price, 62 percent Fe CFR China, increased at the beginning of the year and reached around 90 USD/t by mid-March. By the end of June, this price had fallen back to almost 55 USD/t, only to start growing again with prices up towards 75 USD/t in late August, early September. Currently the price is fairly stable at around 60 USD/t. With an average iron ore price 62 percent Fe CFR China of around 71 USD/t so far for 2017, the iron ore market has seen quite a rebound from 58 USD/t in 2016 and 56 USD/t in 2015. There are several reasons for this market change. Higher than expected steel production and GDP growth in China are certainly important ones. But there are also other reasons with long term effects, such as, the increasing demand for better quality iron ore needed to produce cost efficient high-quality steel products. Another is the increasing volumes of mid and low-quality iron ores mined and the associated relatively lower supply of high quality products. These tendencies can be observed all over the world, but they are particularly important in China where the need to reduce environmental problems and energy wastage as well as improving low productivity, which are some of the effects of low quality ores, are top priorities. This has led to an increased demand for high quality iron ores with an iron content of above 65 percent. Consequently, the price spread between the low quality iron ores (below 58 percent), the 62 percent standard on the one

hand, and the high quality (above 65 percent) and the 62 percent standard on the other, has increased. The discount for the 58 percent iron ore price and the 62 percent iron ore price was around 30 USD/t at the end of 2016, compared to 8 USD/t earlier in the year. The premium paid for qualities above 65 percent Fe has increased gradually over the last couple of years. It is substantial. Sometimes it has reached 50 percent on top of the 62 percent index price. The development of three distinctly different markets for iron ores, below 58 percent, around 62 percent and for the highest quality products above 65 percent, seems to be well under way. It will be more important to state which quality is

There are several reasons for this market change. Higher than expected steel production and GDP growth in China are certainly important ones. being referred to, when giving an iron ore price in the future. It is also important to consider where the iron ore is be transported to, as the index includes transport to China and hence if the transport involved is shorter, the price paid will be affected.

Corporate concentration Corporate concentration in the iron ore industry continued to increase in 2016, as it did in both 2014 and 2015. The earlier trend of decreasing concentration, due to swift production increases by many small and medium sized producers not utilizing their full capacity during the 2005–2008 period, was reversed in 2009. At that time, the major producers got their large

expansion programmes up and running. Since then, corporate concentration has increased steadily and in 2016 the ten biggest producers accounted for 62.3 percent of total production (61.8 percent in 2015). The ‘Big 3’ iron ore mining companies (Vale, BHP and Rio Tinto) also continued to increase their share of total world iron ore production from 42.1 percent in 2015 to 42.6 percent in 2016. Vale, the Brazilian mining company, remained the world’s largest iron ore producer, with 349 Mt of iron ore produced in 2016, up from 346 Mt in 2015, a new all-time high. All of Vale’s mines are located in Brazil and its market share rose from 16.5 percent in 2015 to 16.6 percent in 2016. This was still below its peak share of 18.8 percent in 2007. Rio Tinto was the third largest producer until 2013 when it was overtaken by BHP Billiton (now BHP). However, in 2016, Rio regained second place when it produced 281.3 Mt and thus had a market share of 13.4 percent. Rio Tinto has most of its mines in the Pilbara region in Australia and, in addition, controls the Iron Ore Company of Canada (IOC) with mines in Labrador. BHP slipped down to a market share of 12.5 percent in 2016 (13.1 percent in 2015). BHP’s controlled production in 2016 was 262 Mt compared to 274 in 2015. The production stop at Samarco due to the dam failure catastrophe was the sole reason for this. Except for the Samarco joint venture with Vale in Brazil, all of BHP’s mines are in Western Australia. However, the level of corporate control at the production stage underestimates the real concentration of the iron ore sector, especially by the three largest companies. Large amounts of total output do not enter the market, but are produced at captive mines or mines which have a protected or restricted market. Corporate concentration, if measured by the share of the major companies in global seaborne trade, is considerably higher. Vale alone controls almost 24 percent of the total world market for seaborne iron ore trade, and the three largest companies in 2016 controlled 61.1 percent, down from 64.4 percent in 2015. Most probably corporate concentration will continue to increase in the current low-price environment. As most unprofitable mines have

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already been closed down, further increases of concentration will depend on the continued expansion plans of the ‘Big 3’ and possibly the Australian miner Roy Hill controlled by Hancock Prospecting Pty Ltd.

Project pipeline In 2016, global production of iron ore rose by 80 Mt. Most of this tonnage came from Australia and Brazil where large-scale project rampups took place. But there were also signs of increased production elsewhere because of rising iron ore prices. In India, the relaxed export restrictions for iron ore led to the reopening of mines and production grew. UNCTAD, in its report “The Iron Ore Market 2017”, forecast that the annual supply would grow by a little less than 200 Mt between the years 2017–2020. Further that the ‘Big 3’ (Vale, Rio Tinto and BHP) could add as much as 60 Mt to capacity in 2017. Vale is continuing its ramp-up of production at the S11D mine in the Carajas. The final capacity is projected to be 90 Mt per annum to be achieved by 2020. By the end of 2017 capacity is estimated to be 22.5 Mt/annum. Other than that, Vale is expected to focus on other metals in the near-term future. Rio Tinto has two interesting projects: the Koodaideri at a feasibility stage and the 10 Mt/annum Silvergrass mine which was officially opened on the 30 August, 2017. The Koodaideri project aims to sustain the quality and tonnage of the company’s Pilbara blend product. The project includes a 40 Mt/y dry crushing and screening plant and a 170 km railway line linking the mine with Rio Tinto’s main railway line. BHP continues to develop the South Flank Mines which will sustain the company’s production levels. The mine, which could start production sometime after 2020, has seen revisions of its costs as estimates have been revised upwards. Roy Hill is continuing the development of its 50 Mt/annum iron ore mine in Australia. Fortescue Metals Group, the fourth largest iron ore producer, has communicated that the company will slow down growth and focus on production.

Market Outlook Global GDP growth in 2016 was lower than expected at the start of the year. This was partly


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due to the Brexit vote in the UK, and also to uncertainties related to US policies and lower than expected growth in many developing countries. However, according to the IMF October 2017 World Economic Outlook, the global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. This includes broad-based upward revisions in the euro area, Japan, emerging Asia, and other European countries and Russia, which more than offset the downward revisions for the US and the UK. In China, healthy GDP growth is expected at 6.8 percent in 2017. In 2016, world crude steel production increased by 0.6 percent or 9.6 Mt. For the first 10 months of 2017, growth was up 5.6 percent (75 Mt) compared to the same period last year. This points towards growth in the industry. China alone accounts for roughly half of the crude steel production globally and the country’s crude steel production grew by 6.1 percent in the first 10 months of 2017, compared to the same period in 2016. The World Steel Association’s Short Range Outlook October 2017 for world steel use, anticipates an increase in world steel demand of 2.8 percent in 2017, followed by an increase of 1.6 percent in 2018. China’s steel demand is expected to increase in 2017 by 3.0 percent and remain flat in 2018. However, this represents a turnaround from the April 2017 predictions of steel consumption in China for the year, of zero growth in 2017 and a contraction of 2.0 percent in 2018. The growth in world steel production came to a halt in 2015. Even if 2016 showed some growth, the fast growth period of 2000–2010 seems to be over. The decisive factor for steel market prospects is the direction of economic change in China. It is not the slowdown in Chinese growth per se that would lead to slower steel demand growth over the longer term, but rather the reduced share of investment in Chinese GDP. With lower steel growth, the scrap ratio of the steel burden will increase as steel more and more becomes available for recycling. This will limit demand growth for virgin units of iron ore. Thus, pig iron production could arguably give a more accurate picture of the demand for iron ore than crude steel. In 2016,

pig iron production increased by 0.1 percent or 1.1 Mt. That would have generated an additional demand of roughly 1.8 Mt iron ore in China. However, global iron ore production increased by 80 Mt in 2016. Clearly more iron ore was being produced than was being demanded but, paradoxically, iron ore prices increased during the year. This can, as stated above, be explained at least partly by the increasing price premia for high quality iron ores and an increasing spread between the various qualities With the completion and ramp-up of Vale’s S11D and the independent Roy Hill mine, iron ore capacity will also probably increase more than demand in the next few years. However, Vale has flagged that capacities might not be taken into use if the market cannot support more material. This will, however, most probably result in a weaker 62 percent iron ore price in 2018, if the other major producers do not follow suit and also lower their production levels. We expect the spread of prices between the low, medium and high-quality iron ores to remain wide. There seems to be a glut of low quality ores and a lack of high quality iron ore products. If this situation continues, certain low quality mining companies might reduce production while other high quality ore producers might increase their production.

UNCTAD Iron Ore Market 2017 is now available. For more information contact: Anton Löf, Magnus Ericsson, consulting professor at Luleå University of Technology, Sweden.

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backed by the steel industry takes the lead

Bo-Erik Pers takes the mission of the Swedish Steel Producers’ Association – Jernkontoret - very seriously indeed. He is passionate about the development of the Swedish steel industry, and is prepared to do everything it takes to drive the transition towards more sustainable production. Both to make the world a better place, and to contribute towards new business opportunities for steel companies. Text: Anders Ström Foto: Rickard L. Eriksson


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Bo-Erik Pers has been the Chief Executive at the Swedish Steel Producers’ Association since 2010. He left the steel company SSAB in Borlange after more than 20 years to head the steel industry’s historic and prestigious trade association. Since then it has been full steam ahead; inspiring and stimulating years for everyone involved. Bo-Erik is Master of Science in Mechanical Engineering and educated in marketing and leadership. The step from the first years of the 1980s, with technical calculations at truck manufacturer Scania, to his last assignment as deputy MD at SSAB Emea and Marketing Director at SSAB Tunnplåt, is not as far as you might think. The link is steel, which runs like a red thread through his career with a passion that has never lost in its intensity: “I love this industry. The culture and the people are so inspiring. There is a lot of confidence and optimism in the steel industry. I like that. I myself am a technology optimist, even though the industry has both opportunities and the challenges going forward.” The association’s roots go back to the eighteenth century, but it remains an unusually energetic and forward-thinking trade association today. Development is in focus. The organization is reasonably easy to operate with no more than 20 member companies. Nevertheless, over 750 people from the steel industry visit the association’s offices at Kungsträdgårdsgatan 10 in Stockholm every year. The office is ensconced behind a heavy, black iron door of symbolic dimensions, but once inside, it is light and airy.

Its activities are forward-looking and anything but retrogressive. “We want to drive the development of the steel industry and we are an arena for exchange, discussions and joint decisions for the industry’s best. It is extremely gratifying that we received such a strong response from the participants after the Steel Day 2017. The whole industry was represented there. And I know most of them personally. It is a privilege for me.” Bo-Erik appreciates the fact that Jernkontoret has a natural place at the heart of the steel industry, and that the organization plays a key role in its continuous development in a competitive industry where many companies are world leaders in their niches. If leaders and experts at the association are to be able to contribute towards real development in the steel industry, they must also must be listened to. And they are. “We are stronger with the entire steel industry behind us. When we act, we do so with real strength. We work closely with our member companies and there is always an active dialogue between us all. The member companies are good at listening and responding. There is constant give and take.” The government’s agenda is for a fossil-free Sweden by 2045 and the initiative known as ‘the industrial stride’ (Industriklivet), which aims to provide financial support to innovations and projects that can lead to technological leaps and reduced missions in the steel industry, was received with open arms by the whole

of the steel industry. “I believe that our positive attitude towards a more sustainable steel industry surprised some politicians and public officials. Previously we have been more reactive, but today we want to be proactive and to help drive the development forward. The steel industry is working to successively reduce its carbon emissions, and our vision is that the companies will deliver only socially-beneficial products by 2050. This is well in line with the government’s high ambitions when it comes to the environment and sustainability. Discussions and activities in the steel industry have already been taking place for a number of years. Companies are continuously developing more energy-efficient and environmentallyfriendly manufacturing processes and products. But there is more to do. The steel industry’s carbon dioxide emissions are almost directly related to the production of ore-based steel. Real momentum in the environmental work was gained when the Swedish Steel Producers’ Association together with the steel companies presented its new vision almost five years ago. This pointed the way forward to production that was less fossil-dependent, to recovery and recycling, and environmental improvements during manufacturing and at the endcustomers. “I think the vision helped speed up the mental transition in the steel industry towards more environmentally-friendly production. I’m proud of the courage that company representatiN O R D I C S T E E L & M I N I N G 2 , 2 0 17


develop new production methods with fewer emissions. I am pleased, for instance, about SSAB’s foresight when it comes to trying to replace coal with hydrogen. It is entirely in line with production of the future. And they are not alone among steel companies.

ves showed when the decision was taken. It is a difficult commitment, but it’s a necessary change. It’s all about how we in the steel industry see ourselves and how we want to be seen. There is no reason to believe that the conclusions reached by the UN’s Intergovernmental Panel on Climate Change are not correct. The climate threat is a reality. We in the steel industry must do what we can and take responsibility for it. Bo-Erik is convinced that the Swedish steel industry should stick to the production and sales of advanced high-quality steel. That is the hallmark of Swedish steel. It is to their advantage if they continue to develop products at which they excel and then refine them, he believes. With increasingly sustainable production, the Swedish steel industry’s products will become increasingly stronger in the ever-tougher global competition. “Today over 80 percent of Swedish steel is exported. In a new world where customers and consumers are demanding that basic industries take greater responsibility for the climate, it is necessary for steel companies to be at the forefront of this development. Otherwise they will


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soon be out of the picture. I am also convinced that increased sustainability and greater environmental and climate considerations will eventually lead to new business opportunities and increased competitiveness. In recent years, the Swedish Steel Producers’ Association has developed a compass that will guide the organization and its member companies when it comes to meeting the UN’s 17 sustainability goals signed up to by most of the world’s countries and to which they are all committed. A lot will happen in these areas over the next few decades. Business within the steel industry will be decided going forward. At the same time the transition must occur at a reasonable pace, so that the steel companies are able to manage their commitments. The steel industry is positive to the transition, but a number of things give cause for concern and uncertainty. “In part it’s about time and timing. Steel companies need time in order to change. These are long-term investments and it’s no good being naive when it comes to how fast it is possible to make the transition. As long as steel companies have plants that work they will use them, even if, at the same time, they have to

The association’s member companies have already come a long way when it comes to sustainability and the environment. But a major challenge is that new energy sources must be of sufficient high quality, be delivered securely and at a competitive price. A voltage drop at a production plant is very expensive. Alternative sources of energy must be able to be produced, stored and delivered in a way that is good for the steel industry. Overall, the Steel Producers’ Association and the steel industry are already heading for the future. Through conversations and collaboration with the government and the relevant authorities, the transition will go faster than anyone could have imagined ten years ago. Who thought then that the electric car would be a real option for a large number of car buyers and that the cost of solar power would fall so dramatically? For the pioneers who want to be first, there is a lot of money to be made. Perhaps it is precisely this opportunity which will finally motivate the steel industry to drive the development just a little harder and speed up the transition to production with significantly lower emissions. Everyone today is aware that sooner or later it has to happen, because the demands from end customers and consumers for sustainably-produced products are continuously increasing. With this in mind, 2050 suddenly does not seem as far away as we thought at first glance.

Increased sustainability will eventually lead to new business opportunities.

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Column by Henric Borgström


was the word of the day when World Steel turned 50 Posco, Sydkorea. Foto: Worldsteel/Seong Joon Cho.

Despite the widespread political pessimism, discussions at the World Steel Accociation’s 50th anniversary conference in Brussels, the city of its birth, were characterised by ‘recovery’ – a continued recovery giving hope. This was reflected not least by the Swedish steel and mining companies. Many of the major international steel manufacturers are integrated vertically with extensive mining operations. World Steel’s own assessment was that demand for manufactured steel 2017 would amount to 1,622 Milliton (Mt), an increase of 7 percent compared to last year´s (Sweden about 4 Mt). However, China, which accounts for approximately half of the world’s steel production, is a problem when it comes to the statistics. The country is reported to have recently closed about 600 older, environmentally-damaging steel mills which mainly supplied structural steel. This has meant that the statistics have been recalculated from a new base figure, in which China’s increase in volume has been set at 3 percent. The uncertainty surrounding China’s continued austerity measures and the implementation of more severe environmental measures (closed factories) has meant that World Steel does not feel able to assume that the Chinese domestic market will continue to grow. The largest percentage increases in 2018 are expected in the Asean countries (South-east Asia)

with nearly 7 percent, in Turkey with 6 percent (after a decline of two percent this year), followed by India with 5.7 percent and Russia with a 3.2 percentage increase. EU countries and North America are expected to increase by just over one percent. It should be pointed out that the steel industries in the EU and North America are today about four times bigger in volume than in Russia. World Steel forecasters pointed out that the worrying trends seen in the spring have subsided somewhat. These included rising populism and protectionism, concerns about the new president’s policies in the United States, elections in several EU countries, immigration and the slowdown in China. Developments in Korea and China’s increasing depts (despite its gigantic unpaid receivables account owed by, among others, the US) remained as risks. The increasing level of discussion regarding overvalued equity markets was also seen as a risk. Increasing trade, however, was seen as a positive trend. The Japanese steel industry is expected to perform even better in view of the construction prior to the Summer Olympics in Tokyo in 2020. On the other hand, South Korea with the world’s largest shipbuilding industry has suffered a decline due to the surplus of sea tonnage. Countries expected, sooner or later, to increase their use of steel sharply were Egypt, Brazil,

Argentina, Mexico, India, Vietnam and the Philippines. The construction sector has recovered well in the developed countries after its collapse at the time of the 2008 financial crisis (Lehman Brothers). Infrastructure investments in a number of developing countries have also had a positive impact. This year, the automotive industry is expected to contribute significantly to the recovery of the steel industry. It is not certain, however, that the United States, China and one or two other countries can continue to boost motoring as much in the future, according to World Steel. Swedish representation consisted of Bo-Erik Pers, Chief Executive at the Swedish Steel Producers’ Association, Göran Carlsson, Swerea, and Martin Lindqvist, SSAB, the latter accompanied by Per Olof Stark, Head of Special Steels.

Henric Borgström

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Lundin’s heir

takes the lead in South America Adam Lundin is the new CEO of Lundin Group’s  South American mining and exploration company Filo Mining having been appointed in the early autumn.  Text: Anders Ström Photo: Foto Market One Media / Filo Mining.

The company has a market capitalization of over one billion Swedish kronor and is listed on First North Stockholm and on the Toronto Stock Exchange in Canada. Adam Lundin takes over from geologist Wojtek Wodzicki who will continue as CEO for another America-focused mining company within the Lundin Group, NGEx Resources. Wojtek will also contribute to Filo Mining’s exploration work for new deposits. Filo Mining has performed strongly on the stock market in 2017 because of rising metal prices, not least for copper. Adam is 30 years old and the second oldest son of Lukas Lundin. He is the first grandchild of the founder Adolf Lundin to receive a leading position in the business. Adam, along with brothers Harry (who manages his own commodity fund), Jack (who is employed by gold company Lundin Gold with a major mining project in Ecuador), Will (employed by the oil company Black Pearl), and Ian Lundin’s son Axel (head driller on one of Lundin Petroleum’s oil platforms in Norway), are active representatives of the third generation of the Lundin family. Adam is following both in his grandfather’s and in his father’s footsteps by taking over the operational management of Filo Mining. He will contribute to the development of the Filo


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del Sol, with its huge deposits of copper, gold and silver located in the Andes Mountains on the border between Argentina and Chile. Most recently Adam worked for the investment bank Pareto Securities in London and New York, where he focused on the commodities market. He will be able to make use of that experience in his new role as CEO. What is your role at Filo Minining? “My most important task is to create shareholder value and strengthen the share price by developing the deposits for mining and starting production. Filo Mining already has a skilful team of geologists and engineers, but now we will work even more actively with the stock markets and capital markets. Our goal is that we will double the stock price in two years,” he says on the phone from western Canada. Adam speaks English, not Swedish. He grew up in Vancouver and works and lives in the Canadian coastal town. Filo Mining’s head office is located there and employs five people. The remaining 25 employees work in Argentina. He expects to travel to the deposits in South America four or five times a year. It is Adam’s new full-time commitment. Why did you take on the role as CEO of Filo Mining?

“I felt that the time was ripe for it. It was the next logical step for me. I was prepared. For someone who grew up in the Lundin family, it is natural to do business in the commodities market. That’s our life. The CEO role allows me to contribute what I know about finance and value creation to Filo Mining, but I will also involve myself in other companies within the Lundin Group. We have long experience of growth and value creation.” Ever since Adam was a child, he has dreamed about becoming CEO of a company in the Lundin Group sometime in his life. He has heard many stories of different oil and mining adventures around the kitchen table at home. Both his grandfather and his father taught Adam how to make money from commodities. Lukas Lundin has made several major deals in the mining industry over the years. He, if anyone, knows what to do to create value. “Yes, there are big shoes to fill. I am well aware of that. It is reassuring both for me and the shareholders that he is chairman of the board at Filo Mining.” What is your driving force professionally? “It is to continue to develop the business that grandfather founded and that my father and uncle expanded. In the coming years we are set to grow even more. It’s great that we are four

brothers in the third generation. We help each other and are even stronger together.”

Adam Lundin

What does the immediate future hold for the company, Filo Mining? “We will further investigate the deposits and plan for production. Our assessment is that it will take two years before we can take the decision to turn Filo del Sol into a producing mine and two more years before we can start commercial production.” Adam points out that the Lundin Group is much bigger today than when his father joined the family business. When the mines in Canada needed to be developed further in the 1980s, there was a natural division between the Lundin brothers. Ian Lundin took over the oil company. Lukas Lundin moved to Vancouver and took over the mining companies. He remained there for over 25 years before moving to Geneva a few years ago. The Lundin Group has acquired a great deal of knowledge and expertise of the commodities market from which Adam will benefit in his work. His ambition is to have as much success as his father did in the 1990s with Argentina Gold and Musto, among others. In this context, Lukas Lundin’s experience is worth its weight in gold: “We have a professional relationship since I am the CEO and he is chairman of Filo Mining, but we also have a very good personal relationship. He is my father, friend and mentor as well. He is there for me when I need him. Just like his father was for him. I will be able to develop the business independently. But it won’t be easier for me than other CEOs because I belong to the Lundin family. If I do not live up to expectations, I’ll get to know it right away.” How are you as a person? “I am a ‘team player’. Dependable and committed, but also frank and direct; ‘a straight shooter’. I’m not seen as being a particularly ‘cocky’ person. I am more humble as a person, and try to perform my duties as well as possible. This is something I share with my brothers.” What are the similarities between you and previous Lundin generations? “The family has always been important to us. We celebrate all important occasions together and support each other. In that way, I too have become more family-oriented. My brothers and I have

the same kind of passion for the commodity market, and we have the same attitude towards entrepreneurship, growth and value creation. Possibly, in this third generation, there is an even stronger drive to highlight and prioritize our responsibilities in terms of sustainability. We always start our meetings with these issues at Filo Mining. When we plan the annual budget at Filo Mining, 20 percent of the costs are usually related to safety and the environment. This was not the case in the industry 20 years ago. At that time no one talked about CSR.” You are more Canadian than Swedish, but still have a strong relationship with Sweden. How come? “I was born in Dubai and grew up in Canada. Sure, I’m Canadian, but Sweden is a special place for me. I have been in the Stockholm archipelago every summer for as long as I can remember. The family has been on Nämdö since the late 1930s, and today I own a house in the archipelago for my family. Actually, many of our Nämdö friends came over to our wedding in Canada.” Lundin Group’s companies have many Swedish shareholders, don’t they? “Yes, we have had a strong base of Swedish shareholders for a long time. They are extremely valuable to us and important in our success. When I was appointed CEO, Stockholm was the first place I wanted to visit and meet the investors.” You will “commute” between Canada and South America. How do you see operating and doing business there? “It looks promising. Most of the deposits are in Argentina. The government there is positive towards mining. In Chile, there is long experience of mining, not least in the case of copper. Chile is as much associated with copper as Saudi Arabia is to oil. Father has also done several successful deals in the area. This means that Lundin is a household name there. For us to be successful, we need to have a strong team locally. And we do.” Adam, as Lundin’s heir and representative of the third generation, is responsible for developing the business further. Initially, South America is his playing field. And that’s just the beginning. N O R D I C S T E E L & M I N I N G 2 , 2 0 17



its services for the mining industry Andreas Johansson, ÅF.

“Well-designed projects where mining companies and engineering consultants collaborate with the focus on more efficient processes, sustainability and digitization can provide even faster developments within the mining industry.” So says Andreas Johansson, Key Account Manager for the mining industry at ÅF.


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The consulting giant ÅF is perhaps best known for analyzing, planning and leading the development of major industrial projects. The technical consultancy agency also participates in infrastructure projects in Sweden and abroad, such as the Stockholm Bypass (Förbifart Stockholm) and the Norwegian airport Gardermoen. The tougher competitive position within technology consulting services, digitalization and the internationalization of their clients’ businesses has meant that ÅF’s new CEO Jonas

Gustavsson, recruited from Sandvik, has introduced a new strategy and will launch a new organization with four international divisions from January 1, 2018. It also means the development and clarification of ÅF’s offering to the mining industry. ÅF is one of Sweden’s largest consultants in the field of mining. Andreas Johansson, born in Luleå and brought up in an environment where the mining industry plays one of the main roles, is responsible for ÅF’s key mining customers. He has been employed at ÅF since 2014 after a number of years in the automotive industry. The new organization inspires him. “We will become even clearer with our offering for the mining industry. A typical assignment for ÅF could be when we build and deliver a new smart control system for a mine. Our breadth is our strongest card and it distinguishes us from many of our competitors. We have experience of the entire value chain, from the early phases to production, to mine closures and post-completion work. We contribute to more efficient processes and work for better safety and the environment, for example, in terms of noise and vibration, and we believe that UX and interactive design will become powerful tools for designing future workplaces.” ÅF employs about 150 mining engineers, rock mechanics, mining technicians and geologists. When it comes to moving rock and cities, ÅF has the solutions. Together with other units within the consulting company, Andreas and his colleagues have planned for the urban development of Kiruna, Gällivare and Malmberget, together with LKAB, one of the consulting company’s key customers. Andreas is driven by contributing to the continued development of the mining industry. The Swedish mining industry is at the forefront of the world, he says. “From an international perspective, Sweden has always taken the lead. I was in Kazakhstan this summer and it is still common for people there to drill into rock by hand with old Atlas Copco machines. In Sweden, we were operating driverless trains back in the 1960s in the Kiruna mine, and production data has been collected for many years. Our hope is that the mining industry will take an even bigger step

forward and continue optimizing its processes with the existing data.” He is enthusiastic over the development opportunities for the Swedish mining industry. “We are all being driven forward by the high legal requirements placed on the industry and the tough sustainability goals. It’s difficult, but I think the challenges will make us stronger and internationally more competitive. When we are in the lead and driving development, we become even stronger.”

In many ways, Sweden is a forerunner for the international mining industry. We have been able to develop many innovations in Sweden in the meeting between production and technological development, Andreas points out. Well-designed projects in collaboration between mining companies and engineering consultants can lead to even faster development in the future, not least concerning digital transformation which is still only in its infancy.

This is what happened ...

... when ÅF gave LKAB an energy-efficient control system LKAB is a world-leading producer of upgraded iron ore products for steel manufacturing. ÅF was commissioned to replace the control system of the mine’s 600 fans with a new ABB system. The new control system provided better ventilation control which reduced energy consumption and improved the working environment.

to control. Fans that are constantly in use consume large amounts of energy, even when there is no real need for air circulation.


With the new control system, it was possible to reduce the operating time of each fan by an average of eight hours during each 24-hour period. This was achieved by focusing the ventilation on the areas where it was most needed. This in turn led to considerably lower, more efficient energy usage. With the new control system, LKAB can also measure the air quality and thereby reduce the aeration time.

In order to work in the mine in Kiruna at different levels right down to a depth of 1,365 metres, new air must be continuously brought down and old air removed. Nearly 2,000 cubic metres of fresh air is pumped into the mine every second. During the winter, the air pumped down must also be heated. Upgrading the old ventilation control system was not an option. Many of the fans were not possible

Solution ÅF was employed as the main contractor and assigned the task of replacing the entire system with a new, modern control system that was adapted to the special requirements of the Kiruna mine. The project was successfully completed thanks to the cooperation between the different divisions within ÅF and the great commitment shown by LKAB’s project team.


Source: ÅF.

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A good year for metals

Copper concentrate, Boliden RÜnnskär. Foto: Stefan Berg.

This year has so far been a good year for most metals. In 2017, there was an increase in demand from China and the country continues to be the dominant importer and consumer of most metals. However, the country is starting to take its environmental impact more seriously and further restrictions have just been imposed on the industry.

Some steel mills and aluminium smelters have reportedly been ordered to cut production by as much as 50 per cent in an attempt to reduce the airborne particles that pollutes and potentially kill. There are further reasons for concerns in regard to Chinese demand as the continued planned slowdown in the country’s economic growth continues. Further, since the Party Congress in October, several subway projects have been cancelled and tighter rules on public-private partnerships have been introduced, all of which could slow down demand for metals during 2018. However, at present there is synchronized growth globally that has rarely been seen and demand is increasing in most parts of the world. N O R D I C S T E E L & M I N I N G 2 , 2 0 17


Current volatility in the copper market reflects the weaker than expected Chinese trade and macro data which pressure prices downwards, while mine disruptions push the price upwards. Strikes at Southern Copper and Escondida, admittely short term and without much direct influence on prices, showed the potential for further disruptions next year when labour contracts expire in around 20 mines across Chile and Peru. Further, an outbreak of violence in the vicinity of the Grasberg mine in Indonesia raises concern that the significant recoveries in production that have been envisaged for the mine might not materialise. The copper price has decreased by 1.2 percent since 1 November and was 6779 USD/t. on 28 November. Over the year the copper price has increased by 23 percent. Total stocks at London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) have decreased by 24 percent since 1 November and by the same percentage over the year. The average price for the first 11 months of 2017 is 6104 USD/t, 25 percent higher than the average price for 2016, which was 4866 USD/t. In the short term, the copper price most probably will hold. In the longer term, supply options are enough to satiate demand which could push the average price down slightly.

Metal Prices and Stock (LME) Price Change

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Iron Ore*

The gold price has increased by 1.2 percent since 1 November and was at 1292 USD/oz. on the 28 November. Over the year the price has increased by 11 percent. The average price for the first 11 months of 2017 is 1252 USD/oz, roughly the same as the average price for 2016 at 1249 USD/oz. Thus, the gold price has moved very much sideways over the two last years. Recent rising geopolitical tensions have set a bullish climate for 2018. However, in the short term, the stable US economy with a possible Federal Reserve Bank interest rate hike puts downward pressure on the price. With this in mind, 2018 will probably see prices remain constant.

The iron ore price (62% fines, cfr China) has increased by 7.7 percent since 1 November and was at 63 USD/t. on 28 November. However, over the year the price has decreased by 21 percent. The average price for the first 11 months of 2017 is 61.6 USD/t, more or less the same as the average price for 2016 at 61.5 USD/t. The price of iron ore has held up well during 2017 on the back of robust demand from China. The winter season is traditionally a time of a lower demand, so in combination with the temporary closure of capacity to curb pollution in the major Chinese cities, demand will fall in the short term. This should in turn put downward pressure on the iron ore price. An oversupply situation is expected in 2018 as the Brazilian miner Vale ramps-up its S11D mine, a mine with relatively high grades. Longer term the increase in scrap availability is an issue of concern. Thus prices (62% Fe, cfr China) in 2018 will be under pressure and the market will most probably see a lower average price.

This year we have seen a deficit on nickel, estimated at 170 kt by Glencore, as demand from the steel industry increased by roughly 9 per cent over the year. This has led to substantial increases in the price. However, the nickel price has fallen by 9.3 percent since 1 November and was 11363 USD/t. on 28 November. Over the year to date, the nickel price has increased by 13.5 percent. Nickel stocks in LME warehouses have fallen since 1 November by 0.4 percent, and in 2017 LME stocks have increased by 2.2 percent. The average price for the first 11 months of 2017 is 10,305 USD/t an increase of 7.4 percent compared to the average price for 2016 of 9,596 USD/t. In the short term, the news from the Philippines that the ban on open-pit mining would remain can very well push the price upwards. For 2018, most analysts predict continued deficits however smaller than for 2017. This will probably keep prices high and even slightly higher. Long term, there is a lack of projects and new capacity. A potential surge in demand from the battery industry with rising sales of electrical vehicles, combined with a growth in the stainless steel sector would keep nickel prices up. The zinc price has decreased by4.1 percent since 1 November and was 3190 USD/t. on 28 November. Over the year the price has increased by 26 percent. LME stocks have decreased by 15 percent since 1 November. Over the year, LME stocks have decreased by 49 percent. The average price for the first 11 months of 2017 is 2,862 USD/t, an increase of 37 percent compared with the average price for 2016 of 2,090 USD/t. Long term. the Glencore capacity utilization is key to the price as the company is the largest producer. Currently a concentrate deficit limits metal supply. On top of this, the steel markets’ demand for zinc is growing. However, the price will probably move sideways in 2018.


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Copper Gold


Stock (LME)

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*Iron Ore 62% fines


LĂśf 2017

Anton LĂśf

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The golden jubilee offering of Stressometer Flatness Control System brings mill speed and productivity to a completely new level. Reduction of strip breaks, rejects and pass time, leads to rewards up to hundreds of thousands dollars/euros on the bottom line. No wonder our customers believe we are turning steel into gold. Stressometer Flatness Systems – unstoppable for five decades.

ABB AB Measurement & Analytics Force Measurement Phone: +46 21 32 50 00




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Find out more at

Swedish company behind

World’s Hardest Steel


“With this type of steel, an incredibly large number of applications can benefit from improved wear resistance and therefore have a longer life span.”


“One challenge we face is that companies compare the price of our products with traditional ones. The important thing is to calculate the total cost, including savings, which the typical purchasing manager doesn’t have the data for.” Martin Nilsson, CEO VBN

Facts Vibenite® 290 • Hardness 68-72 HRC (depending on the hardening, i.e. component size and cooling speed). • Proportion of carbides: Approx. 25 volume % in fully hardened condition. • Pore-free with extremely low oxygen content.

It is an extraordinary steel. The hardest and most wear-resistant metal on the market, according to VBN Components. This steel does not need forging or machining to turn it into a finished product. Any shape can be produced. And as a real bonus, considerably less material is consumed. In late November 2017, VBN Components launched what the company claims to be the world’s hardest steel: Vibenite® 290. The hardness of the alloy, plus its high carbide content, makes it a realistic alternative to cemented carbides for numerous applications that demand high resistance for both wear and heat. Its possible to get it in near-net shape too. “We interact daily with customers who have very specific requirements regarding materials performance concerning wear and heat resistance. We have developed a material with excellent qualities to meet their needs, and which can be ordered in near-net-shape,” says Martin Nilsson, CEO of VBN Components. The innovative steel is a replacement for cemented carbides. Vibenite® 290 alloy is highly wear and heat-resistant and contains a high proportion of carbides; around 25 volume percent

in a fully-hardened condition. This high carbide content means that the alloy can replace cemented carbides in many situations, especially for larger details with complex designs. Furthermore, the alloy’s unique properties make it suitable for any type of application where erosion and abrasion are present, especially when adapted to metal cutting tools. Typical users come up against numerous obstacles to finding the ideal material for their tools and components. They traditionally forge and roll metal bars that are then drilled, milled and turned in a complicated logistical sequence. With additive technology, VBN makes the process obsolete. The result is higher efficiency for the user and, thanks to the material’s greater wear resistance, substantially increased product efficiency and life-span. “The limitations of traditionally-made products result in a compromise. Instead of choosing the material best-suited to the product, producers are instead forced to use a material that they can process. By focusing on material performance, we turn this around completely,” says Ulrik Beste, Chief Technical Officer at VBN. VBN Components has been producing extremely hard, wear-resistant steel products using this technique for a number of years. Step-by-step, the company has moved towards, what is today, the world’s hardest steel – a milestone in materials development. The need for less material in both end-use and manufacturing is one of the reasons why its environmental impact is 90 percent lower compared to

traditional materials, according to tests at one large Swedish company. “We have demonstrated in a customer test that Vibenite® 290 lasts many times longer than the existing products. And we know that even higher performance is possible,” states Ulrik Beste. The company is situated in Uppsala, near to Arlanda, and focuses on developing materials that can be manufactured into wear-resistant metal components directly from powder. The 3D-printing, additive manufacturing technology, is free forming. VBN Components is conducting a range of important customized projects to improve the competitiveness of the engineering industry. The team at the heart of this innovative company are alumni from Uppsala Innovation Centre, ranked as the world’s 10th best business incubator. VBN is supported by the Swedish Energy Agency which, in September 2017 granted SEK 4 million in funding to VBN for the development of new 3D-printed materials during the next two years. The company operates a highly modern steel plant in Uppsala manufacturing highly durable steel components using 3D-printing under the brand name Vibenite®. The company is a provider of Near-Net-Shape components branded Vibenite® to clients that need metal components with high complexity and/or extreme wear-resistance. This is only the beginning for VBN. The company is investing in future technologies that are getting ever closer by the day, not least regarding 3D-printing of very hard steel. This was not thinkable ten years ago. N O R D I C S T E E L & M I N I N G 2 , 2 0 17

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New Developments of Optical Flatness Measurement in

Metal Production Flatness measurement, quality assurance and process control have all become increasingly important due to the higher quality demands which are placed on steel and aluminum plates and strips these days. Furthermore, it is becoming increasingly difficult to produce harder and stronger materials with good levels of flatness. Accurate, systematic measurement can greatly help to improve the manufacturing process. Text Dr Pär Kierkegaard and Helmut Hackl.

Shapeline’s laser line triangulation system is based on red diode line lasers. If a surface has a flatness deviation, the slight bending of the laser lines can be detected by a matrix camera and the software then converts the image data into topographical 3D-information. Since only the position of the line rather than its intensity is important, this method is very robust to surface reflectance variations. Two parallel lines are used to compensate for material vibrations. A wave or buckle will cause the distance between the lines to change. This can be used to separate vibrations from flatness. In addition, a laser line-based flatness gauge can also measure actual strip width and off-centre. Shapeline has been leading the development of this technology for 20 years. Until now the

main applications have been cold (heavy plates and flexible solutions for strip process lines). Now, two new product lines have been introduced; VeriFlat®, a standard fully integrated solution for strip and plate, and VeriShape for hot strip mills.

and makes it possible to integrate a complete flatness measurement system into a sturdy aluminium tube with computing power, data storage, communication, power-supply, cooling system and laser safety protection.

Recent developments have made it possible to develop an optical flatness sensor for Shapeline that is fully integrated. This is possible thanks to the introduction of ShapeCAT, an advanced high-speed smart camera, designed around a high-performance image sensor and developed specifically for flatness measurement. The internal processors compress image data into flatness data which enables the rest of the system to be built with standard parts. This simplifies installation, maintenance and support,

In VeriFlat® electronics and optics required are integrated and fixed inside the sensor. The sensor can be connected to a plant network, operator work station, speed sensor and/ or auxiliary equipment directly. No cabinet, PLC or extra computer is required. This has the following advantages: • The sensor is factory-adjusted and calibrated. Hence, expensive and complicated calibration is not required. • Installation is straightforward and fast. N O R D I C S T E E L & M I N I N G 2 , 2 0 17


VeriFlat® The electronics and optics required are integrated and fixed inside the sensor.

A part of the user interface. Left top part shows a colour coded topographical map. Underneath is a defect map indicating areas out-of-specification. To the right a 3D-view of the same plate.

• The sensor may be moved easily between lines or measurement positions. • The total cost is low. • VeriFlat® can be used for plates and strips up to 2 m wide, and has been verified in over 10 different installations with different applications, e.g. cut-to-length, EGL, strip processing, plate production etc. Flatness measurement under hot conditions has long been a challenge, and a number of different gauges have been used in the past with varying results. They are often inaccurate and unreliable, and cannot therefore be used. Strip speed, heat shimmering, cumbersome calibration, water and moisture are factors that complicate the measurement. To overcome this Shapeline, in cooperation with SSAB and with financial support from Sweden’s innovation agency Vinnova, has developed a system known as VeriShape for hot band measurement based on laser lines. ShapeCAT also plays an important role in the design of this product. The resolution provided enables strip edge-detection which is used to compute strip shape (I-units, crossbow, ski), off-centre and width, all in the same sensor. The heat-shimmering effect has been reduced by bringing cold air into the measurement field, drastically improving the accuracy. The approach was first demonstrated through the installation of a full-scale system into a measurement house after the exit of the last roll stand at SSAB’s hot strip mill in Borlänge. Sev-


N O R D I C S T E E L & M I N I N G 2 , 2 0 17

eral systems are now up and running. A novel approach for calibration has also been developed and integrated into the measurement house which enables precision calibration under production conditions. This simplifies and shortens installation times as well as drastically simplifying maintenance. VeriShape has been installed inside air-conditioned measurement housing and consists of the following parts: • A mechanical supporting structure mounted on the floor. • A sensor frame with 2 ShapeCAT cameras and 2 double-line lasers, hinged at one end. • A calibration column for in-house calibration. • Four holes through the floor in the measurement housing for the light beams. • A large fan for reduction of heat-shimmering. Calibration can safely be done during operations. Since calibration and system adjustments can be made while the line is in operation, the calibration is done under the same conditions (hot) as for the measurements. A large number of strips have been successfully measured with good results and the effects of heat shimmering have been limited. In all, Shapeline has six different flatness solutions from hot strip mills to finishing. These include systems for wide plates and precision strips and scanning for fixed materials on measurement tables, in addition to the solutions presented in this article.

A novel approach for calibration has also been developed and integrated into the measurement house which enables precision calibration under production conditions.

Schematic arrangement of VeriShape. The left figure shows measurement position and the right shows calibration position.

The Authors are Pär Kierkegaard, Vice President, and Helmut Hackl, President, Shapeline AB.


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Graphite Electrodes – a unique and increasingly valuable tool in steelmaking The graphite electrode is an indispensable material used in electric arc furnace (EAF) steelmaking which, depending on energy costs, is a more efficient and less expensive steelmaking method compared to blast furnace (BF) manufacturing. Text: Peter SylvÊn.

Three electrode tips being lifted out of an EAF. Envicom and its supplier Trasteel delivers quality.


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EAF steelmaking involves using recycled steel scrap and emits much less CO2 than a blast furnace, making it the more environmentally favourable choice for producing steel for cars, refrigerators, bridges, and the like. Blast furnaces are the second largest man-made source of carbon dioxide after the cement industry. The manufacture of artificial graphite was first patented by Edward Goodrich Acheson in 1890 and the synthetic graphite produced was used mostly for lubrication. The electrode for melting metal was developed some decades later. Graphite electrodes have a crystalline carbon structure capable of conducting high electric currents while withstanding very high temperatures. It carries the electricity that melts the scrap iron and steel in the EAF. About 3 kg of electrodes are needed to produce one ton of steel. Graphite has some unique properties that make it the only material available suitable for this process. For instance, its mechanical strength increases with higher temperatures, and it has high thermal conductivity, high thermal shock resistance, excellent machinability, a high sublimation temperature and a low modulus of elasticity. Graphite electrodes are basically made from needle coke mixed with coal tar pitch. After being formed by extrusion and baking, these electrodes are graphitized over extended periods at temperatures exceeding 3,000° C. This is about half the temperature of the surface of the sun. They are then impregnated under high pressure and baked again, a process that is repeated depending on the properties required for the final electrode. More details on this are given later in this article. The electrodes are machined to fit different size graphite nipples, also known as pins, at each end. The quality requirements for these nipples are even higher than for the electrodes, as the joints they form will be the weakest link in a chain of assembled electrodes in the furnace. Mechanical abuse, high thermal and electrical loads, and oxidation means that the pin is the critical part that needs to perform really well under stress. The actual mechanical jointing process of one electrode to another is also an important procedure that needs to be closely

monitored to avoid costly electrode breakages. Inevitably breaks happen. It is up to the electrode manufacturer and the furnace operator to keep them to an absolute minimum. The electrode grade normally used in large EAFs is classified as Ultra High Power (UHP). Lower grades like HP can sometimes be used in less demanding ladle furnaces used for refining steel.

Graphite has some unique properties that make it the only material available suitable for this process. UHP grade electrodes are made with diameters ranging between 250 and 750 mm, and in lengths of between 1,500 and 2,700 mm, the largest weighing in at just over 2 tons. The end properties, and thus the performance of the electrodes, depend greatly on the type and quality of the needle coke used. Other key parameters in the manufacturing process are the size of the coke particles used and the baking process, in which the pitch binder in the electrode pieces is coked to develop an infusible carbon bond. This is done in large kilns at up to 900° C for up to 70 days. As gases are released from the binder, the pieces expand. Therefore the products need to be very carefully supported so that their dimensional tolerances are retained. The electrodes unloaded from the kiln are now carbon; they are hard, abrasive and difficult to machine (diamond tooling is required). Compared to graphite, they have poor thermal properties, poor electrical characteristics, good mechanical properties and the crystallinity is random. Further pitch impregnation of the pieces is made in order to improve the porosity, permea-

N O R D I C S T E E L & M I N I N G 2 , 2 0 17


Electrode tips still glowing hot after having melted a 50 ton batch of steel scrap. Trasteel electrodes ready to be shipped to a steel plant in Europe.

bility, density and mechanical properties. The final step in manufacturing electrodes is to convert the carbon to graphite. This so-called graphitization requires temperatures in the range of 3,000° C which completely changes the material properties. The actual properties of the final electrode are directly dependent on the highest temperature reached during graphitization. Note that certain grades of artificially-made graphite can be used, when exposed to enormous pressures, to manufacture artificial diamonds. This pretty well mirrors what happened to carbon/graphite when natural diamonds were created on earth millions of years ago. Graphite and carbon oxidize at elevated temperatures in the air. Thus, no diamond can survive a regular house fire regardless of how hard they are at room temperature. Back to electrodes and the 2018 supply situation. The key raw material for electrodes, needle coke (a form of calcined petroleum coke), accounts for approximately 70 percent of the input costs of graphite electrode production. This limits the ability of current graphite electrode producers to increase production rates to meet demand. A longstanding limiting factor to the increase of graphite electrode production is the supply of quality needle coke. Only a few refineries around the world can supply it. The price for needle coke has increased dramatically in 2017, in part due to flooded plants in Texas during hurricane Harvey and partly due to the fact that needle coke is being used


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increasingly for making anodes in lithium batteries. Interestingly, there is much more graphite than lithium in a Tesla car battery. These changes are affecting the whole supply chain – with raw materials suppliers unable to meet demand from electrode manufacturers and steel mills around the world concerned that they will run out of replacement electrodes. In addition, this year has seen several environmental restriction-related developments in the graphite electrode, carbon and mining sectors in China, the largest manufacturing country of electrodes and the largest steel producer in the world. This has resulted in the demand for electrodes being higher than its supply for the first time in over a decade. How this situation will unfold in 2018 is impossible to predict. One thing, however, is for certain. There are no products, regardless of price, that can replace unique graphite electrodes in EAF steel production. Electrodes are a significant cost factor in EAF steel production. In many cases, they are only second to energy in magnitude. Since electrodes are an important part of production costs, it is imperative to keep their share of total costs within the budgeted amount. With steadily increasing prices, the steel plants’ spending on electrodes is becoming increasingly important. Failure of an electrode brings with it enormous losses to the user. Not only the loss of the graphite electrode itself, but also the lost production and possible consequential damage to

equipment. Real losses also include all disruptions and inefficiencies upstream and downstream of the furnace. This loss of production may result in missed shipments and further furnace problems as attempts are made to make up for lost production. Proper use of electrodes is the best insurance against furnace interruptions. The user must do what is necessary to avoid any action which reduces the effectiveness of the electrodes. Maximizing the return on this investment is a top down management-driven commitment. There are no excuses for poor performance. The alternative is high costs, reduced productivity and the possible loss of a competitive position in the marketplace. Rarely is the graphite electrode the limiting factor in an EAF operation. However, every electrode problem causes a major loss. Electrode problems can be minimized and even totally eliminated. Selecting the right electrode supplier together with the use of the correct practices can assure trouble-free operations. Professional help from Envicom can be used to provide the training element. A relatively small effort can result in major benefits. Our experts make inspections and audit companies’ present systems, and give the customer valuable advice. That is a good starting point.

The Author, Peter Sylvén, Envicom AB, represents Trasteel electrodes in Scandinavia.





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improved performance mean that mines can achieve the same production volumes with fewer trucks. The addition of four to eight productive hours each day, which otherwise would be used for blast clearance, can increase production by as much as 30 percent compared with conventional trucks. “By removing the operator from the truck and running the entire trucking loop autonomously, mines can achieve significant operational cost savings and efficiency gains that are unheard of using the traditional underground trucking methods currently in use,” says Mark Ryan, Product Line Manager Trucks at Sandvik Mining and Rock Technology. The company has proven these benefits with automation projects at mines from Canada to South Africa. “One focus area in automating these trucks is the safety of operators and other personnel,” says Jarkko Ruokojärvi, Product Line Manager Equipment Automation at Sandvik Mining and Rock Technology. “We’re relocating operators from underground to the surface and isolating the automation area as well as reducing safety hazards caused by operator fatigue.”

The new evolution in AutoMine® Trucking is decline haulage, which enables high-level utilization and improved productivity also in declines for underground hard rock miners who use ramp haulage. This enables several additional daily hours of haulage. The new intelligent trucks have inbuilt data collection capabilities, ensuring that all information can be visualized at all times and that every load is analyzed. High speed continuous production in autonomous mode enables higher utilization and extended equipment lifetime.

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operations in Avesta with Utcas® In October 2017, UHT (Uvån Hagfors Teknologi) finalized the installation of its new level 2 real-time process control system UTCAS® to Outokumpu Stainless in Avesta, Sweden. The delivery and implementation work by UHT included an update of the current level 1/PLC for the AOD and a UTCAS® process control system for both existing AOD and Ladle Furnace operations. The delivery also contained a longterm system and process support agreement. Johan Ahlberg, manager, AOD Converter

and Ladle Furnace at Outokumpu Stainless AB, Avesta Works says: “Now we have the tools to further trim our performance in our AOD and LF operations. This is absolutely necessary if we are to meet the demand for high quality stainless steel grades while also increasing our operational flexibility and improving our cost efficiency. The accuracy of the UTCAS® real-time system and the new system platform allow the AOD and LF process to share real-time data and enables continued process improvements.”

UHT is a Swedish engineering company with roots in stainless and special steel production. It delivers complete AOD & CLU® converter refining solutions including the simulation and real-time UTCAS® process control system platform, which today is available for EAF, AOD, BOF, VOD/VD and LF. The UTCAS system is a four in one solution; process development and simulation, powerful real-time process control, process evaluation and data storage. UHT has so far made twenty UTCAS® deliveries worldwide.

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Quality Day Scandinavia, seminar, June 12–13, 2018 Do you produce flat metal? Do you care about product quality and Industry 4.0? If you do, take the opportunity to attend the Quality Day Scandinavia, June 12–13 2018 to get the latest information about measurement technology and quality improvement. The organiser is Quality Alliance, an organisation driven by nine companies with a focus on the steels and metal industry all over the world. Spread over two days, you will learn about on-line measurement systems of physical properties such as: thickness, flatness, width, roughness, oil-layer thickness, tensile and yield strength, surface defects, speed and length. You

will also learn the latest about strip process equipment such as mill control, strip guiding, stabilization, coating and oiling as well as Quality Execution Systems and Industry 4.0. The seminar runs from June 12 to June 13. The first day, June 12, starts with a Swedish “fika” (coffee) at 10.00, and after several hours of learning and inspiration the seminar will end in the afternoon on June 13. The venue will be close to Arlanda airport and transport to/from Arlanda will be arranged. The expected participants are people working with the quality and production of heavy plate and strip, from hot rolling to finishing, such as,

hot strip mills, plate mills, all kinds of strip process lines, as well as cut-to-length, slitting and leveling lines. The seminar is free of charge, including documentation, lunch, dinner and ‘fika’ breaks. The number of participants will be limited.

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Jernkontoret Annals No 7 • 2017 • Volume 201

Full house in Wallenbergsalen at IVA. On stage Isabella Lövin, Swedish climate minister. Photo: Pia Nordlander/BildN.

Success for Steel Day 2017 This year’s Steel Day on 7 November was, as always, a day of lively discussion, new encounters and plenty of laughter. Some 180 people from industry, academia, politics, business, stakeholder organisations and civil society met at IVA in Stockholm, Sweden, to discuss the steel industry’s role in a sustainable society. This year’s Steel Day, like last year’s, put the spotlight on visions and more specifically on technological developments, social benefits and creative individuals. Additional focus this year was placed on sustainability and the fact that steel was 100 percent recyclable. The day began with Swedish climate minister Isabella Lövin, who talked about how Sweden


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will reach the UN’s global goal by 2030 under the headline “A fossil-free welfare country”. She mentioned HYBRIT– the commitment undertaken by SSAB, LKAB and Vattenfall for a fossil-free steel industry – as a good initiative in which Sweden can take the lead in climate work. “Steel without carbon would be epoch-making and enable us to reduce global emissions,” said Isabella Lövin. This was followed by a discussion on the steel industry’s joint climate road map which is being developed in cooperation with Svante Axelsson, national coordinator of Fossil Free Sweden. Representatives from SSAB, Ovako and Uddeholm AB talked about their specific challenges to be completely free from fossil fuels by 2045. “If you had asked me ten years ago, I would have said that the steel industry was the hardest nut of all to crack. But now it is the first industry to present its roadmap towards a Fossil Free Sweden,” said Svante Axelsson. Johnny Sjöström, CEO of Uddeholm AB and Göran Nyström from Ovako then talked

about the recyclability of steel and that the steel industry had been working with circular scrapbased steel production for over 100 years. What will the future look like for the smaller community mills? This question was discussed by representatives from Avesta and Hagfors municipalities and from Outokumpu and Uddeholms AB. Teknikcollege, a network of competence centres in which companies collaborate with municipalities, providers of education and “Nattis”, night nursery which enables single parents in particular to work shifts, were described as one example of how local authorities are working together with companies. The next programme point was an intense discussion of how the traditionally male-dominated steel industry is to become more equal. Linnéa Engström, talent manager at SSAB, pointed out the importance of having both male and female role models in the company. Nicklas Nilsson, Head of the Kanthal Product Area at Sandvik Materials Technology, thought that one should

Helén Axelsson and Svante Axelsson.

Bo-Erik Pers, CEO Swedish Steel Producers’ Association, and Lydia Capolicchio.

The audiance was active during the day. Photo: Pia Nordlander/BildN.

Photo: Pia Nordlander/BildN.

start by looking at oneself in the mirror in order to achieve change. “I’m not saying I’m for affirmative action, but those who work with recruitment must put on their ‘quota glasses’, otherwise nothing will happen,” said Nicklas Nilsson. Amanda Lundeteg, CEO of Allbright, said that it was still largely prejudices that governed appointments to higher positions. “I often hear that women ‘do not want to’ or even that ‘there aren’t any’, but, as far as I know, there is no research that supports such claims. However, there are studies that show that men and women with the same characteristics are assessed differently, such as the Norwegian study of Hans and Hanna,” said Amanda Lundeteg. Johan Kuylenstierna gave an inspiring lecture on the UN’s global goals and how the Stockholm Environment Institute (SEI) cooperates with the Swedish Steel Producers’ Association to help the steel industry achieve its vision to produce only socially-useful products by 2050. “The steel industry is putting pressure on other industries by taking this lead,” said Johan Kuylenstierna.

There was then a debate between Björn Haase from Höganäs, Cecilia Johnsson from Uddeholm AB and Christina Arc-Friborg from Sandvik on how companies work specifically with sustainability issues. Uddeholm AB, for example, has been a pioneer in the steel industry’s work on ecosystem services, something that SSAB also knows a lot about, and Höganäs is running several water purification projects to save the oceans. The afternoon’s competitive battle between the politicians and industry representatives produced a lively debate with great entertainment value. The highlight came when the teams had to change places and roles with each other and explain the changes they had made to the industry’s competitiveness in 2030. They mentioned everything from starting their own schools to restoring the railways and succeeding in fossil-free steel manufacturing. Entrepreneurs from Mojave Grönt, Anja Hellström and Anton Schneider, explained how they had realized their idea of a sustainable multi-purpose gardening tool using stainless steel from Sandvik. They also took the opportunity to show their hori hori knife for the first time.

‘La Grande Finale’ was Naim Josefs beautiful “steel collection” on the catwalk. When the day was over, most of the participants attended the official dinner at IVA during which the entertainment included both stand-up comedy and a choir. Additionally, the ‘Future Scholarship’ of 400,000 SEK was awarded to the winning team LLJMD in the ‘CRE8 the Future’ competition, organised by the Steel Producers’ Association at the end of October. Overall, Steel Day 2017 was a great success and much appreciated by those who attended. “It feels fantastic to see the response to Steel Day, our day of visions. The response from participants has come to us both through our recent evaluation survey, and also through spontaneous emails with praise and thanks. It’s really valuable to be able to create a meeting place where the steel industry is able to find new partners to meet the challenges of the future,” said Bo-Erik Pers, Chief Executive, Jernkontoret. Steel Day 2018 will be arranged by Jernkontoret and take place in Stockholm on 5 December.

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The Swedish Steel Producers’ Association first with certified innovation leader Anna Ponzio at the Swedish Steel Producers’ Association is one of the first eleven people in Sweden to become a certified innovation leader according to ISO 17024. The certificates were awarded with pomp and ceremony at the Innovation Management Conference at the Royal Institute of Technology (KTH) in late November.

“It feels great to be part of this pilot group now being certified. During the training we have all increased our understanding of innovation leadership and received tips on tools and methods,” says Anna Ponzio, research and innovation coordinator at Jernkontoret. The certification is part of a project, in part funded by Vinnova, with the overall aim of making innovation leaders into a profession. In order to strengthen innovation capabilities, many actors have worked together and created systems for innovation management that include strategic focus, goal-oriented management, clear work processes, and concrete structural and cultural capabilities. “The aim of the Steel Producers’ Association is to maximize value creation from the projects and activities in our research and innovation programmes. The investments we make will have an impact in terms of increased competitiveness, social benefits and user-value. Otherwise we will have failed,” says Anna Ponzio. With the support of VINNOVA the project was launched to enable innovation leaders to become qualified and certified, as was previously done with project leaders, quality managers and those with environmental responsibi-

lity. The project involves more than 20 partners. RISE is the project leader and KTH, Kairos Future, Ampilfy Innovation and the member association ‘Innovation leaders’ are the other governing partners. In addition, Saab, Ikea, Sandvik, Oriflame, Karolinska Hospital, several universities and colleges, the Swedish Steel Producers’ Association and a number of smaller companies are represented in parts of the project. “Traditionally, innovation and R&D have mistakenly been treated as the same thing. I believe that making a profession of innovation leadership can finally contribute to a cultural change in which innovation becomes a holistic approach that encompasses the entire business,” says Anna Ponzio. The certificates were presented at the Innovation Management Conference 2017 at the end of November. The conference addressed innovation management in theory and in practice, offered the exchange of experience and led to discussions on concrete measures for increased innovation capabilities. The conference was arranged by the Vinnova-funded project “Development of the Innovation Management Programme”. N O R D I C S T E E L & M I N I N G 2 , 2 0 17


Value Creation by Digitalization in the Metals Industry casts regarding product consumption reduces the need for large holdings of stocks significantly. Eva Pétursson described SSAB’s Smart Steel concept and how it is built on the power of data. Every individual steel product has its own unique ID, loaded with data. Smart processes can read, use and add data to be used in further processing operations. Performance sensors in components can continuously report their status back to the supplier. In the future, smart marking, like DNA, will enable more efficient recycling of materials. The reuse of structural components from old buildings demands reliable marking, as Peter Hradil from VTT Technical Research Centre of Finland pointed out.

What is Digitalization and how can we use it to create value in the metals industry? These were the two of the questions some 70 researchers, data analysts and industrialists met to discuss for two half days at the FinnishSwedish joint seminar “Value Creation by Digitalization in the Metals Industry” in late November /early December 2017. Thirteen high quality presentations were given, starting from an informative introduction, culminating in a panel discussion between some of the speakers and the invited guests. Big data, Artificial Intelligence, the Internet of things, Business ecosystems and Industry 4.0 were just a few of the topics discussed. Digitalization was the theme of the third seminar in a series of seminars held between Jernkontoret and its Finnish equivalent, Metallinjalostaj. The two previous conferences were


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held in Stockholm 2015, with the theme “Metal Production and Sustainable Opportunities” and 2016 in Helsinki, with its theme being “Metal Industry: a necessity for circular economy”. The objective of this seminar was to explore what we really mean by “Digitalization” and how industry, particularly the metals industry, can make use of it to improve its operations. Digitalization of processes like ordering, manufacturing and sales actually started many years ago. Today the technical development of sensors and increased data capacity together with the falling prices of computers has made it possible to generate, process and analyze huge amounts of data and to use it to design new business concepts and to improve the efficiency of manufacturing processes. Going forward, digital transformation will increase profitability while reducing the environmental impact of the industrial operations. Many examples were given of how business models have changed from being production and the sales of products, to including service, performance data and component status. Johan Walther of Höganäs AB stated that interaction with customers and the creation of reliable fore-

So what really is digitalization and how can value be created from it? Well, the answers vary considerably depending on who you ask. Günther Winter of Primetals said in his presentation that each company must define its own particular digitalization implementation strategy. Digitalization is not a matter only for the data analysts and IT experts. It is also a very useful tool for researchers and business developers. Let the final words of Martin Wallin from Chalmers University end this article. “The course is set. Let’s get our hands dirty and start working. This is the only way to learn how to develop Digitalization in business.” By Robert Wikman.

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Nordic Steel & Mining Review, december 2017  

Nordic Steel & Mining Review, december 2017