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Scrap Management & Optimization Solutions

ScrapMaster is a trademark of Harsco Corporation. All rights reserved. BOSS is a trademark of Management Science Associates, Inc. All rights reserved. This presentation is intended for customers of Harsco Corporation. All information included in this presentation, including copyright and trademarks, is expressly reserved and no part of these materials may be reproduced or distributed outside of the customers organization in any form without Harscos prior written consent.

Harsco's Core Ideology

Core Purpose
To build teams that win with integrity anywhere in the world
Customers Employees Shareholders Suppliers Value Creation Value Capture Value Selling Be the Best Sustainable Superior Performance (20-Mile March) Ethical in Thought, Word and Deed Disciplined Thought, Disciplined Action and Disciplined People Transparency Safety Personal Accountability and Responsibility Customers Targeted Market BHAG Envisioned Future

Core Values

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Uncompromising Integrity and Ethical Business Practices


Harsco Integrity Framework: Code of Conduct Security Practices Safety Practices Global Management Practices Internal Control

People the "A Team"


Human Capital Framework: Global Talent Management System for Recruiting, Developing, Retaining and Assessing Human Capital

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Continuous Improvement
Continuous Improvement Discipline through Lean and Six Sigma Methods Business Transformation

Value Creation Discipline


Economic Value Added (EVA) Value Selling Culture

Scrap consumption in Steelmaking


Global Steel production in 2009 totalled 1.2 billion tonnes, using approx 600 million tonnes of scrap The value of that scrap amounts to approx $140 billion* As the worlds largest steel producer China consumes more scrap in steelmaking than any other country 550 million tonnes LST in 2009 170 million tonnes scrap consumption in 2009
160 140 Scrap Used (million tonnes 120 EAF 100 80 60 40 20 0 China Europe Rest of Asia N. Am India CIS S. Am M.E. Africa Oceania BOS

Europe N. Am Rest of Asia China India M.E. Africa CIS S. Am Oceania 0 50 100 150

Crude Steel Production 2009

EAF BOS

200

250

300

350

400

450

500

Steel Production (million tonnes)

Steelmaking Scrap Consumption 2009

*Based upon 2009 average scrap price of $230 per tonne

Scrap is the most significant raw material cost

70% of steelmaking costs are raw materials Scrap makes up a large proportion of this

Estimated Scrap input cost $204 million/year $374 million/year 3 million tonne BOS plant 1 million tonne EAF plant

*Based upon average scrap price of $340 per tonne

Best Practice scrap management

Best-in-Class scrap management allows the Steelmaker to: Downgrade/reject merchant scrap loads Reduce scrap yard landfill costs Minimise scrap stocks Optimize scrap charges

Through Processes Impact

Consequences of poor scrap management:

=> EAF delays waiting for scrap => Incorrect weights charged => Low yields => Increased slag volumes => Missed specifications => Increased refractory wear => Greater flux, O2, power consumption
Financial impact:

1 minutes lost production time approx $3000 10oC Cooling requirement approx $440 per heat +100 ppm [O] at tap approx $51 per heat

Harsco Metals Scrap Management Solutions

Optimum scrap mix is charged each and every time on time the correct weight, the correct quality, zero delays Full inspection, including state of the art radiation detection for all purchased scrap Proactive reporting of scrap deliveries to enable cash recovery associated with OOS loads, rejected loads and contaminated loads Real time IT control for internal and purchased scrap with full stock tracking and reporting system Full traceability and accountability of scrap throughout site so that potential for fraud can be eliminated

ScrapMaster

Four integrated operating modules for cost-effective management of the entire scrap supply chain, with full segregation and traceability.

Basket Loading Incoming scrap

Scrap handling

ScrapMaster

Powered by

Optimizing

Management information reporting puts you in control


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ScrapMaster Value

ScrapMaster can unlock significant savings

Save on external scrap purchasing Realise the maximum value of internal scrap Charge the optimum scrap mix on time, every time Monitor the entire scrap charge history

The unique video review function in ScrapMaster allows the furnace manager to monitor exactly what scrap was loaded at what time, in case of any problem with a particular heat.

Scrap Optimization

ScrapMaster now integrates BOSS (Blending Optimization Software Suite) functionality Under license from Management Science Associates, Inc. World leading optimization program Yield-based cost calculation Actual scrap cost per tonne of steel Value of the scrap inventory on a real-time basis Minimises scrap charge cost, grade by grade Based on specific grade production data entered by the steelmaker planned tonnage, scrap composition, prices, availability and inventory

BOSS References

Essar Steel Algoma ArcelorMittal PST AK Steel ATI Carpenter Technology Universal Stainless MetalTek International McConway Torley Sparrows Point Scrap Processing The Federal Metal Co Waukesha Foundry WCI Steel

Canada USA USA USA USA USA USA USA USA USA USA USA

Integrated EAF Stainless Steel Stainless Steel EAF Stainless Steel Special Steels Special products Integrated Special products Special products Integrated

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BOSS Functions
Single heat optimization Multi heat optimization Campaign optimization Scrap buy planning Inventory management Results feedback and interpretation

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Optimization Process Flow

STAGE 1 Input Scrap Grade Data

STAGE 2 Input Steel Grade Data

STAGE 3 Optimized Charge Design

Scrap Grade Name Steel Grade Name Scrap Type Chemical Analysis

Scrap Grade Name

Chemical Analysis Physical Properties Yield Cost Information

Restrictions Element Recovery

Restrictions

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Scrap Input Data

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Steel Grade Data

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Inventory Data

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Optimized Charge Solution

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Solution Information

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Scrap Buying Plan

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Successful Optimizing
Factors for Optimization Accuracy Input scrap analysis is critical
Regular melt tests and spectrographic analysis of scrap required to build database Update model as more and more information is gathered

Factors for Optimized Operations Accurate recording of scrap charge weight


Use ScrapMaster system to ensure scrap charge weights are recorded heat by heat

Furnace characteristics to be established


Full partnership approach needed so that details of furnace characteristics and production plan are shared

Exact Knowledge of scrap being charged


Use ScrapMaster DGPS system to ensure full tracking of scrap charge

Clear demonstration of optimization impact


Compare actual scrap charge recipe, weight and cost heat by heat and day by day with optimized solution

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Scrap Analysis
Accurate chemical analysis data is required for scrap materials Need to begin population of scrap database To start process, need melt tests of each scrap Ongoing testing of scrap will be required to populate database with a large number of samples to improve model accuracy

Melt Test of Scrap

Incoming scrap type

Update scrap analysis database

Spectrographic Analysis Of Scrap

Repeat analysis regularly to build database and improve model accuracy

Load data into optimization model

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Optimization Improvement
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Feedback Data Receive Scrap

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Analyse Chemical Data

7 Confirm Results

Continuous Feedback

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Update Scrap Analysis

6 Analysis Scrap vs Steel (residuals)

Process Improvement

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Melting EAF

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Results (history)

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Optimized Savings Example


Analysis of existing scrap charge practice is made and then compared with optimized solution Total cost of both are established and savings calculated
Grade 1424 1674 1988 1412 1981 1608 1639 1655 1962 1451 40 1932 1437 1915 1449 Name Plate HIC Plate Linepipe Plate LowAlloy Plate MicroAlloy Plate MildSteel Section LowAlloy Section MicroAlloy Section Mild Steel Strip HIC Strip High Carbon Strip IF Strip Linepipe Strip Low C Strip Low S Ca Strip Med C # of hts 66 27 126 82 623 22 760 120 96 188 458 35 277 35 239 3,154 % 2.09% 0.86% 3.99% 2.60% 19.75% 0.70% 24.10% 3.80% 3.04% 5.96% 14.52% 1.11% 8.78% 1.11% 7.58% 100.00% 27,755 172,695 32,863 77,210 34,867 Savings per month

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The Value of Charge Optimization

Quantifying the cost of production constraints (e.g. sulfur composition of the heat) Lowest cost liquid steelmaking Optimized use of scrap available Use data for informed scrap purchasing and negotiation Planned scrap buy Full control of scrap cost Tangible savings

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End-to-End Scrap Management Solution


Full management of scrap from the moment it arrives on site until it is melted Handling of scrap arriving by road, rail and barge Order receipt, radioactivity control, scrap quality control Processing of scrap on site Collection, transport and upgrading of all internally arising scrap Reception, storage and real time scrap inventory control Scrap charge optimization Loading scrap baskets according to menus received electronically from the production schedule Transport scrap to the furnace on specialist vehicles

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