Steelmaker invests in clean technology

Rautaruukki, a leading Finnish steel producer, is significantly reducing its environmental impact with the help of NIB financing.

A seven-year-maturity NIB loan worth EUR 30 million has been granted to help fund modernisation of the blast furnaces at Rautaruukki’s biggest steel plant on the Baltic coast in Raahe, northern Finland.

The work will help bring the manufacturing process up to date with the latest environmental and technical standards demanded by the European Union.

The blast furnace improvements and new installation in the cast house will also reduce dust emissions by 50% when new filtering and ventilation technology has been installed at the 530-hectare plant.

Environmental effect

When the upgrade is completed, sintering operations at the plant will no longer be necessary, significantly reducing the plant’s emissions into the atmosphere.

For NIB, the loan to Rautaruukki is directly in accord with the Bank’s key strategy of environmental improvement, as well as promoting competitiveness. From the environmental mandate point of view, the project will result in significant decreases of emissions that affect both the global and local environment.

A key environmental benefit of the improvements funded by the loan is a substantial decrease in sulphur and dust emissions from the factory. In addition, the investment will mean a reduction in suspended solids discharged into the Gulf of Bothnia.

Steelmaking not necessarily dirty

Rautaruukki supplies metal components and systems to the construction and mechanical engineering industries. Steelmaking is traditionally seen as a dirty and polluting business. But Rautaruukki has always seen itself as a company challenging that perception.

“We have always tried to operate responsibly and have been investing heavily in clean technology step by step. The NIB loan is allowing us to continue this commitment to the environment,” Rautaruukki’s development director Erkki Pisilä shouts above the din in the plant’s hot rolling area.

External recognition of the steelmaker’s environmental commitment has come from a number of quarters. Rautaruukki has been ranked among the top companies in the Carbon Disclosure Project (CDP) Nordic assessment. The CDP evaluates each year how companies are responding to the challenges of climate change. The CDP is an independent, not-for-profit organisation that assesses large corporations on the basis of the risks and opportunities they recognise from climate change.

In September 2008, Rautaruukki was included in the Dow Jones Sustainability World (DJSI World) index and, for the second year running, in the Dow Jones STOXX Sustainability (DJSI STOXX) index. The indexes include the top companies in their sector that are committed to sustainable environmental development.

The company is obviously taking its responsibility to the environment seriously.

“We will even be filtering and treating the snow and rain water that fall on the site, to ensure that if it ends up in the sea, it will be clean,” Mr Pisilä adds.

Increasing revenue from more efficient recycling

The Raahe plant is capable of producing 2.5 million tonnes of hot metal per year. The steel manufacturing work means there is inevitably plenty of waste. In one section of the huge Raahe works there are mountains of slag and other by-products which can be used by other industries, for instance the concrete industry and agriculture.

Luckily, slag has many commercial uses. After it has been reprocessed to separate any other metals that it may contain, it is granulated for use as fertiliser, in cement and as a durable road base material. NIB’s loan is set to make the slag granulation process much cleaner by introducing new production techniques that will conform to exacting new EU standards.

Although the company recycles what it can, the loan will help reduce the amount of material that is surplus by 25%. This is seen as a win-win situation as it will not only be good for the environment, but also increase revenue as less material is thrown away.