July 28, 2008

Supplier Recruitment Wins $160M Plant

By Anonymous

"One major factor in our selection of this Fulton County site is the close proximity to the North Star Steel mill," stated Andrew Woollett, chairman of the board, ZincOx Resources plc in an interview with Toledo Business Journal Woollett traveled to the United States from the company's headquarters in Great Britain to host the ceremonial groundbreaking for the $160 million facility near Delta, Ohio. The project is planned for completion at the end of 2009.

Woollett explained the importance of locating the new plant across the street from North Star BlueScope Steel LLC. ZincOx uses a rotary hearth furnace to process electric arc furnace dust (EAFD) produced as a waste byproduct at steel mills. North Star BlueScope Steel will be a major supplier of EAFD for the new ZincOx plant.

One of the products produced by ZincOx is pig iron. ZincOx will be a supplier of pig iron to the North Star mill across the street. While ZincOx considered a number of sites for this new plant, proximity to North Star and the Supplier roles they each play offers important benefits, according to Woollett. With the increases in transportation expenses, there are logistical cost benefits to both companies that will result from the close proximity of their operations.

Woollett also discussed additional factors that influenced the site selection decision. The property is close to a rail line owned by Rail America, Inc. that provides easy and economical rail access for the new facility. Steel mills around the country will ship EAFD in bulk rail cars to ZincOx for processing. Rail shipments will also leave the plant to deliver finished products to many of the company's customers.

The British chairman also discussed the environmental benefits of this new operation. Currently, EAFD from steel mills around the country is buried in landfills. It is a hazardous material that can be toxic. The ZincOx technology enables the company to process the EAFD waste byproduct and eliminates its burial in a landfill.

Woollett also discussed the positive environmental aspects of the company's processing technology. "All of the EAFD is processed and there are no environmental concerns. This will be a clean, environmentally friendly facility. We want to bring visitors to the plant to see the trees, landscaping, and its clean operations," he stated.

Woollett discussed the importance of ZincOx's relationship with Envirosafe Services of Ohio, Inc. headquartered in Oregon, Ohio. Envirosafe works with steel mills around the country and buries EAFD in landfills for these customers. Once the Fulton County site is in operation, Envirosafe will deliver EAFD from steel mills for recycling. Woolett advised that Doug Roberts, president, Envirosafe Services of Ohio has been a critical "partner" in providing assistance and support to ZincOx on this project.

ZincOx previously considered sites in Oregon, Ohio and Toledo. A large amount of the material in Envirosafe's Cell M at its Oregon site is electric arc furnace dust and ZincOx considered location of its new plant in close proximity to this Supplier source. At an early stage in the project, some opposition surfaced in Lucas County.

Woolett explained that another important factor in the company's site selection process was a welcoming community and a place where it was easy to do business. "Fulton County satisfied all of our wishes for a friendly and welcoming place to do business," he stated.

Woolett also discussed the importance of the new plant for ZincOx's future. "The Fulton County plant is one of the biggest zinc recycling projects in the world," he stated. "It is very important for us to do this project right as it will be our prototype that we will put in other locations around the world. We are currently negotiating agreements in Thailand and China for EAFD that we plan to process in the future."

ZincOx is planning a number of additional facilities. A plant being planned in Aliaga, Turkey will be identical to the Fulton County plant and is also estimated to cost about $160 million, according to Woollett.

A second plant in the United States is a future possibility. A location in the south may provide advantages as ZincOx assesses options for site selection that will be driven by the Supplier roles for both input material and finished product, according to Woolett.

ZincOx has advanced its technology to be able to recover the waste byproduct from the EAFD. Instead of having this hazardous material buried in a landfill, ZincOx will process the EAFD waste byproduct and recover zinc, iron, and slag for sale to customers.

The recovered zinc is an impure concentrate that must be further processed to upgrade its quality. The company has a zinc processing facility at its Big River plant in Sauget, Illinois where the zinc concentrate is transformed into zinc oxide. This is a fluffy white powder used for a range of technical applications in food, paints, and chemicals.

ZincOx also has a zinc smelter at its Sauget plant. The smelter is currently idle until enough input material can be secured for its regular operation. The Fulton County facility will provide enough zinc material to support about half of the Sauget smelter input requirements.

The Fulton County plant will also produce pig iron that ill be sold back to steel mills that supply the EAFD material. The plant will also produce a slag material that will be sold for construction applications.

Copyright Telex Communications, Inc. Jul 2008

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