The major difficulties are with air and water pollution at the steel mills and foundries. Land problems are not significant because slags are salable as railroad ballast and cement aggregate, or can be used as landfill. Pollution from modern blast furnances is negligible if dust controls and waste heat recovery devices are used, although older plants are not so equipped. The older open hearth furnaces and most of the Bessemer furnances have no pollution controls and would be difficult to adapt to new equipment. The newer basic oxygen furnaces, however, have gas cleaning equipment, venturi scrubbers, and electrostatic precipitators which are effective in removing most of the dust. Many of the steel mills in the United States are antiquated, some actually built before 1900. A large number of these need to be replaced because the cost of conversion to comply with environmental standards is considered to be too high. With steel capacity tight and investment capital in short supply, steel companies have been reluctant to replace them with newer and less polluting facilities. The industry reportedly does not want to invest large amounts of money in pollution controls for older plants, when the plants themselves will soon have to be replaced." In a number of cases, older plants have already cut back production or shut down completely rather than meet the pollution regulations. Foundries have been particularly hard hit by environmental regulations. Many foundries are marginal operations that use old and obsolete equipment. The main environmental problem of the foundries has been air pollution resulting from the melting operations. A large number of foundries have been forced to close in recent years, but the cost of compliance with environmental laws has been only one factor among several. The number of foundries dropped from 3200 in 1947 to 1635 in 1972 and is expected to decline to 1000 by 1980.25 Many of these foundries would have closed for economic reasons even if pollution control laws had not been passed. The effect of environmental controls on the price of foundry products ranges from $14 per ton for small foundries to less than $2 per ton for large ones. Some marginal producers have not been able to bear those costs, even when pass-throughs were permitted. In general, however, the environmental controls have only accelerated a trend toward closure of smaller foundries that was already taking place. For the steel industry as a whole, air and water pollution controls will divert capital that might otherwise have gone into the construction of added capacity. The cost of pollution controls through 1983 may be as much as $10 billion, which would raise operating costs by 10 percent.26 This could increase the price of carbon steel 7-11 percent or roughly $15-$25 per ton. Combined with the shutdown of obsolete plants and those that would be too costly to convert, the diversion of investment capital away from new mill construction could produce a shortage of capacity of 25 million tons by 1983. Furthermore, there is no expectation that foreign countries will increase their capacity enough to permit the United States to import the difference. 24 Steel: Clean Up Or Close Up? Business Week, April 6, 1974: 72. 25 Gutow, Bernard S. Impact of Foundry Pollution Control. Environmental Science and Technology, September 1972: 791. 28 Sheridan, John. Steel's Environmental Costs Could Total $9.4 Billion By 1983. Industry Week, March 25, 1974: 44-46. III. IRON AND STEEL: SUPPLY A. Major International Sources Estimates of the size of the world's iron ore reserves vary but they are generally regarded as sufficient to last for centuries at the present rate of consumption. Proven reserves that are economically recoverable at current prices are believed to be adequate for 75 years or more. A survey of iron ore resources conducted in 1969 by the United Nations is shown in Table 2. Additional exploration will probably increase these figures. 1 Including 3,000,000,000 tons taconite and 600,000,000 tons recoverable iron (Fe) estimated by authors of this chapter. 2 Exclusive of the Asiatic part of the Union of Soviet Socialist Republics. Source: United Nations iron ore survey, 1969. There are four countries that have iron ore reserves in excess of 10 billion tons each-the Soviet Union, Canada, Brazil and Australia.27 Nine more have reserves greater than one billion tons each--the United States, India, France, the People's Republic of China, Sweden, the United Kingdom, West Germany, South Africa, and Venezuela. Other nations which have substantial iron ore reserves and which have exported more than 500,000 tons per year are Angola, Chile, South Korea, Malaysia, Morocco, Norway, Peru, the Philippines, Sierra Leone, Spain, and Tunisia. Since the end of World War II, iron has become a major commodity in international trade, largely because the domestic iron resources of most industrialized nations have been depleted to the point where production levels can be maintained economically only with imports. Much of the iron ore imported by European countries comes from Canada, Morocco, Mauritania, Guinea, Sierra Leone, Angola, the Republic of South Africa, and India.28 Countries in southwestern Europe obtain most of their iron ore from Sweden and Norway, supplemented with small amounts from the Soviet Union. Nearly all of the Communist Countries of Eastern Europe receive their iron ore from the U.S.S.R. The Japanese have a large iron and steel industry but very little domestic ore production. To supply their industry, the Japanese import iron ore from India, Malaysia, the Philippines, Hong Klemic, James, and Eberlein, op. cit., p. 303. Reno and Brantley, op. cit., p. 298. 87-672-74-3 Kong, Australia, the United States, Canada, Peru, Chile, Venezuela, Brazil, Mozambique, the Republic of South Africa, Liberia, Mauritania, and others." Increased world iron production is the result of several factors. As nations industrialize, one of the first industries they develop is steel. Many nations in recent years have reached the stage of industrialization where there is now a need for iron ore by countries other than the major industrial powers. Those countries that have adequate reserves of iron have begun to develop them, and those not so fortunate have imported the iron they required. In this they have been aided by the evolution of large ore carriers that have enabled ores to be transported long distances at low cost.29 In addition, more efficient rail transportation and improved plant location will continue to make foreign ores competitive. The world production of iron ore in 1973 was approximately 858 million metric tons (mt), an increase of 13.1 percent over the year before when 759 million tons were produced.30 Pelletizing is being emphasized in foreign production and is making iron ore beneficiation more important. World pellet production, shown in Figure 2, has risen from essentially zero in the mid-1950's and now constitutes a significant percentage of world iron ore production. The rapidly increasing demand for iron ore is reflected in world production, which has nearly tripled in the past twenty years. By far the largest percentage (50 percent in 1973) of iron imports to the United States comes from Canada (Table 3). In terms of ore value, the percentage is even higher, at 59 percent. Because Canada has extensive iron reserves and relatively low demand, it has evolved as a major iron ore exporter and is advantageously located to supply ore to production facilities in the United States at favorable prices. Investment plans are already underway that are expected to raise Canadian ore capacity to 40 million tons by 1980.31 While it is unlikely that production in British Columbia will expand, increases are expected in Ontario and particularly in Quebec and Labrador. The extra Canadian capacity, in addition to other expansions planned in North America, may result by 1980 in a total North American capacity of 100 million tons, compared to a projected demand of 96 million tons. The estimated size of technically feasible world iron ore production is shown in Table 4. The productive capacity of western Europe is expected to grow at a much slower rate than North America's during the 1970's, largely because of a depletion, of domestic ores. Sweden and Norway are expected to be exceptions to this trend, with Scandinavian capacity rising to 25 million tons (iron content) by 1980.32 The mining capacity of Eastern Europe, however, may exceed the demand of 153 million tons by approximately 40 million tons (iron content). Nearly all of this capacity will be in the Soviet Union which is the world's largest producer of iron ore and steel. Development of new areas is expected, but most of the increase is likely to come from extensions of existing facilities. The Soviet Union is 20 Merklin, Kenneth E. Iron and Steel: Ecology and Energy Will Play Key Roles in Future Industry Growth. Engineering and Mining Journal, March 1974:78. 30 Ibid., p. 79. 31 Manners, Gerald. The Changing World Market For Iron Ore 1950-80. Baltimore, Johns Hopkins Press (1970), p. 307. 32 Ibid., p. 308. 3 Ibid., p. 309. Million metric tons expected to produce 188 million tons (iron content) by itself, of which 40 million tons will be pelletized. Asia is generally deficient in iron ore, but there are some exceptions. The communist countries are expected to have enough to meet internal needs and perhaps enough to export. India also has production which is nearly in balance with its demand. Most of the other Asian countries, however, have very little output of iron ore. SOURCE.-Kenneth E. Merklin. Iron and Steel: Ecology and Energy Will Play Key Roles in Future Industry Growth. Engineering and Mining Journal, March 1974, p. 80. Angola. TABLE 3.-U.S. IMPORTS FOR CONSUMPTION OF IRON ORE, BY COUNTRIES 1 The market price of the merchandise in the principal marketplace of the foreign country at the time of exportation in terms of U.S. dollars, and excludes inland freight, ocean freight, and other charges incurred after the merchandise leaves the principal marketplace. This market price is either the market price of the export to the United States or the market price for domestic consumption, whichever is higher. Certain unusually high prices are believed paid for iron ore for use in paints or for research purposes. Source: U.S. Bureau of Mines. Mineral industry surveys. Iron ore in December 1973. December 1973, p. 4. Source: United Nations. Economic Commission for Europe. "The World Market for Iron Ore."' (New York, 1968), p. 158. Mauretania.. North Africa. 67376 4. 11 |