SDI ventures into copper production

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SDI ventures into copper production

BARRY ROCHFORD - barryr@fwbusiness.com

Friday, May. 25, 2012 at 5:50am

Since Steel Dynamics Inc. was formed in 1993, the company has grown from a single mill in Butler to an array of mills, finishing facilities and fabrication plants across the country that together posted $8 billion in sales last year while employing roughly 6,500 workers — all built on the strength of SDI’s steelmaking capabilities.

Now with its $40-million SDI/La Farga Group joint venture just east of New Haven nearly ready to begin production, the company is hoping to capitalize on another metal: copper.

“It’s a completely different field from what SDI is used to,” said Roy Perala, general manager of SDI La Farga LLC. “Steel Dynamics is in the steel business, and this is a totally different, new market for us.”

But for Fort Wayne-based SDI, it’s a market that makes a lot of sense. The company acquired metals recycler OmniSource Corp. in 2007. Last year, OmniSource shipped 1.1 billion pounds of nonferrous metals, with 17 percent of that being recycled copper.

At SDI’s annual meeting May 24 in Fort Wayne, President and CEO Mark Millett said much of the recycled copper is shipped to Asia.

“In the future, we plan to consume much of that material at our new joint-venture company, SDI La Farga, the copper rod business that we expect to start up next month right here in the Fort Wayne area,” Millett said at the annual meeting.

When SDI La Farga’s 250-metric-ton furnace fires up and begins production, the copper that OmniSource processes will go to the New Haven plant instead, where it will be used to make 5/16ths-inch, or 8-millimeter, copper wire rod that will be sold to customers who will draw down the wire rod to make smaller-diameter copper wire.

Steel Dynamics announced the joint venture with copper wire-rod and pipe maker La Farga Group of Barcelona in April 2011 and broke ground for the New Haven plant the following month. SDI owns 55 percent of the joint venture, with La Farga owning the remaining 45 percent.

“I believe that La Farga had been looking for a partner for a while here in North America,” Perala said. “I believe they had talked to others, and then once they talked to Steel Dynamics it seemed like a natural fit because of our ownership of OmniSource (and) that we have a supply of No. 2 copper, which is the main feedstock in this process.”

The joint venture with La Farga Group is SDI’s second; in 2009, the company formed Mesabi Nugget LLC with Kobe Steel Ltd. of Japan to produce high-purity pig-iron nuggets.

SDI chose the New Haven site because of its proximity to OmniSource operations and because the plant’s customers are within a 400- to 500-mile radius.

In April and May, SDI La Farga was busy commissioning equipment in advance of production. The copper mill has the capacity to produce 180 million pounds, or 90,000 tons, of copper wire rod a year.

When the plant begins production, copper scrap from OmniSource will be delivered by trucks and sorted at two large hoppers outside the plant. Conveyors then carry the scrap to the gas-fired furnace inside. The furnace melts the copper, and additives are put in the molten metal to create a slag that pulls out the impurities. The furnace sits on large rollers, allowing it to tip one way so the slag can be removed and the opposite way to pour the molten copper.

The red-hot copper flows through a series of burners to a large casting wheel that forms it into a continuous bar about 4 inches wide by 2 1/2 inches tall. It passes through a machine that forms the bar’s corners to 45-degree angles, then is run through a series of wheels that stretch the copper as they spin, gradually shaping it into the circular 5/16ths-inch wire rod.

The wire rod is spun into coils that weigh about 3 1/2 tons, placed on pallets and then wrapped in plastic before being shipped by truck.

The SDI La Farga plant ran into some resistance from neighboring residents concerned about its air emissions; the plant received its air-quality permit from the Indiana Department of Environmental Management in September. Perala said SDI has worked to address those concerns.

“We’ve had meetings with the local residents,” he said. “You’re always going to have people that are against putting a plant in their backyard. But we are using the most up-to-date pollution control equipment, and the permit has been approved by IDEM. So we feel very comfortable with the solution that we have out there.”

Perala said the plant will employ 35 to 40 workers, and about half of the work force was promoted or transferred from other SDI and OmniSource facilities, “so it’s been a good opportunity for them.”

Those workers aren’t the only SDI influence found at the new plant. It was built with beams made at SDI’s structural and rail division plant near Columbia City and joists and decking from the company’s New Millennium Building Systems division.