Kobe Steel, Ltd received an investment license on March 31 from the Socialist Republic of Vietnam to proceed with a detailed feasibility study to construct four ITmk3 ironmaking plants.

The plants will have a total capacity of 2.4Mt/y and, if the project is agreed, will be located in Vietnam’s Nghe An Province. The total project cost is estimated to reach 100 billion yen ($1.068bn). Kobe Steel is considering the formation of a business in Vietnam to produce and market iron nuggets using the next-generation ITmk3 ironmaking process that it developed.

The first commercial scale ITMk3 plant started operations at Hoyt Lakes, Minnesota, USA in January 2010.

The ITMk3 process is a coal based rotary hearth process offering lower CO2 emissions than a blast furnace while producing an iron ‘nugget’ which has melted and solidified during the process thereby producing an iron grade similar to pig iron and ideal for charging to an electric arc furnace.

Plans call for the early establishment of a locally incorporated company through which the project can be carried out. A detailed feasibility study will be conducted, aiming for first-phase construction to begin in January 2011.

Vietnam forecasts that domestic steel demand will continue to grow in the future. Currently, Vietnam is largely dependent on importing scrap and semi-finished steel products to meet its iron unit requirements.

As the ITmk3 Process can produce high-grade iron units from Vietnam’s iron ore and coal, Vietnam has high expectations for the ITmk3 project. Vietnam’s iron ore from the Thach Khe mine contains a relatively high amount of iron but it also typically contains around 0.07% zinc, which makes it difficult to use in blast furnaces where the maximum zinc charge is about 0.07%.

The ITmk3 Process will enable Vietnam to make effective use of its mineral resources, and the use of relatively inexpensive raw materials will help improve the profitability of the project.