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US-based Primary Energy Recycling reduces financial risk in ArcelorMittal joint venture

Tuesday, 11 January 2011 03:05:53 (GMT+2)   -  

Tags: coking coal , raw mat , USA , North America , ArcelorMittal , investments , M&A , steelmaking | similar articles » SteelOrbis News

Oakbrook, Illinois-based Primary Energy Recycling Corporation, a clean energy company that generates revenue from capturing and recycling recoverable heat and byproduct fuels from industrial processes, announced Monday an agreement with ArcelorMittal to amend the contract between the two companies for their Harbor Coal joint venture.

The terms of the amendment include Primary Energy Recycling agreeing to a tolling fee reduction on the project in return for the elimination of any responsibility for operation and maintenance costs on the project going forward.

Primary Energy has incurred fluctuating annual operation and maintenance costs for the Harbor Coal project in recent years. These costs peaked at approximately $879,000 in 2008, dropped to zero in 2009 due to the low operating levels of the steel industry, and were approximately $370,000 for the first half of 2010. Management believes that annual operation and maintenance costs going forward would have tracked closer to those in 2008.

The Harbor Coal project, located in East Chicago, Indiana, utilizes waste heat for coal drying, and has the capacity to produce 110 nt per hour of dried, pulverized coal for blast furnaces. The joint venture between ArcelorMittal and Primary Energy reduces costs and improves the competitiveness of ArcelorMittal's blast furnaces by substituting pulverized coal for a significant portion of the coke, natural gas, and fuel oil used in the iron production process. The two companies are the builders, owners, and operators of the facility.

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