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Redcar Blast Furnace Reports
Redcar Blast Furnace Reports
Introduction This briefing sets out the most pertinent points from the
financial and economic cases for the retention and demolition
of the Redcar Blast Furnace. It was created to aid the
understanding of the Teesworks Heritage Taskforce in its
consideration of the heritage assets on the Teesworks site,
alongside consultation and expert opinion.
£35,230,000 to The cost of retaining the Blast Furnace plus building and
preserve the blast operating a visitor centre for ten years is estimated to be
furnace for ten £35,230,000. This is based on fixed costs of £25,410,000
years and £982,000 annual running costs. These figures are based
on the STDC Redcar Blast Furnace Visitors Centre Suitability
Study and indicative costs provided by STDC.
827 jobs could be The Business Case for the Regeneration of the STDC Site
lost by retaining (2020), as submitted to Government, shows that the blast
the blast furnace furnace site of 20 acres has the potential to sustain 516 direct
jobs and as many as 827 when indirect and induced effects
in the wider economy (supply chain etc) are considered.
1
Six jobs could be The STDC Redcar Blast Furnace Visitors Centre Suitability
created from a Study bases its assumptions on six jobs being created in the
visitor centre visitor centre. This could be considered a conservative
estimate. This is 821 fewer jobs than STDC plans to create
on the Blast Furnace site.
£161.4 million A Green Book Analysis based on figures from the STDC
boost without the Business Case shows that the 20-acre Blast Furnace site, if
Blast Furnace developed as planned, would add £161.4 million to the Tees
Valley’s economy over ten years.
2
REDCAR BLAST FURNACE: OUTLINE ECONOMIC APPRAISAL
Outline economic appraisal of the possible retention of the Redcar Blast
Furnace as a visitor attraction - Prepared for the Teesworks Heritage Taskforce
by the Tees Valley Combined Authority
The Redcar Blast Furnace Study reviewed the suitability of the Blast Furnace site for
a Visitor Centre and the following aspects were noted:
• Retention Capital Costs: £20.8m (this assumes that the entire 20 acre site
is utilised);
• Construction of a Visitor Centre: £2.6m (800 sq m visitor centre);
• Ongoing costs £0.9m per annum.
1
NPC: £23.85m (assuming 25% local sourcing of labour and materials (circa
£4m incurred in year 1) and secondly the proceeds of scrap metal from
redundant parts of the Blast Furnace (circa £1.35m)).
• Retention plus provision of a Visitor Centre and assumption of 40,000
visitors by year 4 with average spend per visit £6.50: Gross Direct Cost:
£32m : NPC: £22.15m. Assumptions based on Darlington Railway Museum
as the most directly comparable proposition.
Even under the most optimistic projection for an onsite Heritage Centre (and assuming
only negligible displacement with existing provision, such as Kirkleatham Museum), a
relatively high number of visitors and no other land costs: this option creates a net
present cost over the economic life of the project of: £22.15m (2020 prices)).
The STDC Regeneration Study did not specifically discuss the direct costs related to
the demolition of the Blast Furnace. Rather, it considered that all redundant assets
would eventually be demolished, with the economic surplus being invested in
subsequent phases of demolition and redevelopment. The Blast Furnace site is within
the North Zone, adjacent to the Net Zero Teesside Project and part of the 100 acres
ascribed to clean technology related advanced manufacturing.
The STDC Regeneration Business Case confirms that if fully developed it will have
the following outputs: 121,406 sq m of specialist business accommodation and 2,583
advanced manufacturing jobs, once fully operational. The report goes on to identify a
wider (and very prudent) multiplier effect of 0.6, meaning that total direct, indirect and
induced jobs could equate to: 4,133 or £200m of additional GVA per annum (prudently
using regional average GVA per head) once fully operational.
To put this into perspective: Land Parcel R1a, which contains the Blast Furnace (100
acres), accounts for circa 15% of the total site set aside for the development of the
clean technology advanced manufacturing cluster, the development of which has two
interlinked criteria: pipeline of accessible land and creation of co-located integrated
supply chain (minimising logistics and maximising circular economy solutions).
As well as the identified direct costs of retaining the Blast Furnace and provision of a
visitor centre, there are also a number of other opportunity cost scenarios which need
to be considered:
• Opportunity cost of using 20% of the land: Pro rated, retention of the blast
furnace could reduce direct and indirect employment by 516 and 827 respectively, or
a reduction in anticipated GVA per annum of £24.4m (on full occupancy in year 10 in
2020 prices and including scrappage value of £5.4m);
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• Opportunity cost to investment on adjacent advanced manufacturing site: Vivid
Economics employment land assumptions were based on sizeable land parcels (this
is the third largest such parcel of land ascribed for productive purposes). Reducing
the land envelope diminishes flexibility of use and consequently demand. At the very
least, this could mean a delay in uptake rate (10%), with a prudent assumption being
that the site would be fully occupied by year 11 instead of year 10. An
underperformance of 10% over the course of the development plan (potentially circa
£88m of lost output over 10 years); and
• Opportunity cost of loss of recyclable investment fund to entire STDC site: As
noted above the STDC regeneration model was predicated on using £124.7m of public
sector funds to kick start the development of the Teesworks site. In the early stages,
investment would be into those activities which were commercially viable and would
therefore produce a return on capital which could be subsequently used for
reinvestment (ultimately paying for the demolition of the Blast Furnace). Expenditure
on retaining the Blast Furnace and associated heritage support has been
demonstrated not to deliver the necessary financial or economic return (the most
optimistic being a net cost of £23.5m after 10 years of operation). A capital investment
in the Blast Furnace of £23.4m would, therefore, reduce the overall investment pot
down to circa £100m, meaning that only 80% of the impact would be realised over the
original programme period.
Note on methodology
In order to facilitate comparison between options, common costs (capital and
operational) and benefits (GVA per job, visitor numbers and spend and scrappage)
were identified and applied. A consistent programme period was also applied, based
upon the standard economic life of a visitor centre and costs and benefits were
discounted over that period using the Green Book approved 3.5% discount rate. This
led to easily comparable NPC/NPV estimates for all options with attributable costs and
benefits. A number of scenarios (opportunity costs) were also developed, but kept
separate from the cost benefit analysis, as the magnitude of potential scale of impact
would obscure vital messaging between options.
Conclusion
In summary, the Blast Furnace site of 20 acres has the potential to sustain 516 direct
jobs or 827 (direct, indirect and induced) jobs in the wider economy, equating to a Net
Present Value of £161.4m. Retention of the Blast Furnace and investing in a Heritage
Centre would equate to a Net Present Cost of (£22.15m) over a similar 10 year period.
In addition, there may be further opportunity costs to the wider Teesworks investment
plan by spending in less productive activity, thereby reducing the overall investment
pot by 20% with the possibility that only 80% of the impact would be realised over the
original programme period.
3
Possible Next Steps
The Teesworks Task Force may wish to request a Business Case to consider different
Heritage-based offerings. The Steel Heritage Business Case would utilise the findings
of the Taskforce to provide a detailed Option Appraisal for pans outlined in its final
report.
4
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E.ZX0M Primetals Technologies Limited
Iron & Steel Making
Blast Furnace
Visitors Centre Suitability Study
Technical Specification
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допускается и преследуется по закону.
Неразрешенное
Primetals Technologies Limited assumes no responsibility or liability for any errors or omissions
that may appear in this document or for incidental or consequential damages
собственностью.
Der Inhalt dieses Blattes ist unser geistiges Eigentum. Die
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Description
Revision History
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1 INTRODUCTION
2 SCOPE OF WORK
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Iron & Steel Making
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E.ZX0M Primetals Technologies Limited
Iron & Steel Making
Blast Furnace
Visitors Centre Suitability Study
Technical Specification
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1 Introduction
© Primetals Technologies Limited
The purpose of this report is to assess the current condition of the Blast furnace proper structure
to enable a determination to be made into the suitability for a visitors’ centre to be established.
and shall be prosecuted.
2 Scope Of Work
Review of the current status of the blast furnace proper structure only, to allow safe access
for visitors.
Approximate cost to upgrade / modify the existing structure to allow safe access for
visitors.
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Identification of a suitable location for a viewing platform together with approximate costs.
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Overview
Based on an visual inspection made on the 16th September 2020 utilising the access routes
that had been deemed safe to use, it can be seen that the condition of the blast furnace varies
dependant on its elevation and exposure to climatic conditions. The majority of access routes
are in a severe state of dilapidation and are cordoned off to prevent injuries occurring. The
major risks throughout the whole blast furnace site can be categorised into two areas.
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height and shall continue to do so. The loss of sheeting / cladding shall lead to an increased
© Primetals Technologies Limited
noticeable on the furnace top where it is exposed to external weathering events. The majority
of painting systems on the steelwork structures have decayed to a point where pitting
corrosion and crevice corrosion is prevalent. This shall eventually lead to the failure of
structures.
or deformation that could immediately affect its load bearing capacity. It is anticipated that
small repairs would need to be conducted to maintain its integrity.
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The middle support tower of the blast furnace is the largest structure of the blast furnace and is
Неразрешенное
in excess of 900te.
The top section of the middle support tower carries the load of the dirty gas system and
transmits this load through the lower tower structure to the foundations. From the available
собственностью.
vantage points the lower section of the middle tower structure showed no obvious signs of
degradation or deformation that could immediately affect its load bearing capacity.
The top section of the middle support tower is exposed to the elements and the paint system
has deteriorated. The structure is now undergoing severe pitting and crevice corrosion and has
structural sections that have failed in places. The connecting splice plates of the tower
structure show evidence of laminations and deformation at the joints.
Der Inhalt dieses Blattes ist unser geistiges Eigentum. Die
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Middle tower structure (upper section) heavily corroded Pitting corrosion and splice deformation on middle tower
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E.ZX0M Primetals Technologies Limited
Iron & Steel Making
Blast Furnace
Visitors Centre Suitability Study
Technical Specification
The unauthorized use of this documentation or use
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The furnace top tower is a structure in excess of 400te and incorporates a double outrigger
crane. The top tower support provides the support for housing the furnace charging equipment
and shall be prosecuted.
Pitting corrosion and failed section on beam Outrigger crane splice plate deformation
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unbefugte bzw. bestimmungswidrige Verwendung dieser
Unterlage ist nicht gestattet und wird gerichtlich verfolgt.
Casthouses
© Primetals Technologies Limited
The building fabrics of the casthouse are in an extreme state of degradation due to loss of roof
and wall sheeting. The exposed supporting purlins are showing signs of damage and
and shall be prosecuted.
corrosion. The west casthouse roof has experienced almost a complete loss of sheeting and
the east casthouse has experienced partial loss and has many items of sheeting that have
failed and are about to fall to ground. The wall sheeting’s are in the initial stages of failing with
partial loss. The loss of wall sheeting shall only be exacerbated due to the loss of roof
sheeting.
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Below the casthouse floor, the supporting structure is in good condition with the refractory
brick protection still in place. The end connections to the casthouse floor look in reasonable
condition.
On the casthouse floor, the casthouse machines look in reasonable condition. Fallen roof
sheets are evident in many areas of the casthouse floor. The iron and slag runners have been
and shall be prosecuted.
backfilled to allow for a level area. Pigeon carcasses and excrement is present in many areas
of the casthouse floor.
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The tuyere platform is in good condition with the steelwork and its connections showing no
obvious signs of serious degradation. The tuyere platform floor is complete with its refractory
and concrete in good condition.
собственностью.
All 36 tuyere stocks and their respective copper cooling elements are in position.
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The main charge conveyor supporting structure is showing signs of serious degradation due to
corrosion on the trestles towards the head end of the conveyor. Support trestle bracings have
and shall be prosecuted.
Support trestle heavily corroded at bolted connection Support trestle failed bracings
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unbefugte bzw. bestimmungswidrige Verwendung dieser
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The off-gas system comprising of the offtakes, uptakes, breeches and downcomer are in a
poor state of repair and are showing signs of pitting corrosion. The rate of corrosion is more
and shall be prosecuted.
prevalent at the exposed areas. As the furnace is in the cold condition and with the presence
of chlorides from the North Sea the rate of corrosion is expected to increase significantly. With
sections of staircase and walkways attached to the off gas system, a deterioration of this
system would reduce its ability to support items attached.
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Offtake corrosion
Access systems
© Primetals Technologies Limited
The majority of the access systems (staircases, ladders and walkways) throughout the blast
furnace complex are in an extremely poor state of repair. Many access systems have been
and shall be prosecuted.
cordoned off as they pose a risk to users. Due to the limitation of access throughout the
complex there are many areas that can’t be conventionally inspected due to the safety
concerns. The following areas were unavailable for inspection due to access restrictions;
Hot Blast Stoves
Dustcatcher
Gas cleaning plant
Fume extraction plant
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Due to the access restrictions, the above-mentioned areas could only be inspected from a
distance.
The main defects noted on the access systems include:
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Heavily corroded and holed handrails, standards, mid rails and kick flats
Sharp edges on handrails, mid rails and kick flats
собственностью.
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unbefugte bzw. bestimmungswidrige Verwendung dieser
Unterlage ist nicht gestattet und wird gerichtlich verfolgt.
Staircase with heavy corrosion and holed members Typical stair tread in the process of failing
The ancillary plant surrounding the blast furnace is in a state of disrepair and has many
risks for people accessing the area. The major risks like the rest of the plant are items
and shall be prosecuted.
Cable containment in many areas has failed and cables are left unsupported. These cables
shall eventually fall to ground.
Vent pipes around the stoves area are in a perilous unsecure state as nearly all have
пользование
heavily corroded or failed pipe supports. The waste gas main chimney in the stoves area is
showing signs of heavy corrosion with holed plate work in the top section.
допускается и преследуется по закону.
Неразрешенное
Coke oven gas pipework throughout the blast furnace area is under a nitrogen purge due
to the remnants of crystalline naphtha deposits within the pipework. This pipework is in a
poor state of repair with leaks evident.
собственностью.
Der Inhalt dieses Blattes ist unser geistiges Eigentum. Die
unbefugte bzw. bestimmungswidrige Verwendung dieser
Unterlage ist nicht gestattet und wird gerichtlich verfolgt.
Fume extraction filter plant – sheeting loss Fume extraction – exposed filter bags
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Blast Furnace
Iron & Steel Making
Conclusion
© Primetals Technologies Limited
At present the blast furnace complex is in an extremely dangerous condition and is unsuitable for
allowing access to the public.
and shall be prosecuted.
The current condition of the furnace poses a risk for the trained and competent structural
inspectors and it is proving evermore challenging to inspect for defects and monitor known defects
within the structures.
The overall stability of the blast furnace complex shall only worsen without intervention.
To enable the blast furnace to be developed so that visitors can be admitted, the following shall
need to be undertaken to ensure the furnace’s integrity.
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The costing basis has been calculated so that the following entities of the blast furnace are
retained, and work undertaken to stabilise the structures and corrosion mechanisms: -
Furnace proper.
Main charge conveyor.
Casthouses.
Furnace top and off gas system.
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Project Costs
To undertake the works required to allow visitor access to the blast furnace the following budget
and shall be prosecuted.
Corrective works required to stabilise structures and create safe access £6,500,000
Inclusive of all plant, equipment and materials.
Site CDM infrastructure and management, consultancy and design works £6,800,000
собственностью.
Disabled access.
Total £23,400,000
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Exclusions
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The above costs do not include for any scrap recovery credits.
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Blast Furnace
Iron & Steel Making
The focal point of any blast furnace complex is the casthouse floor where people can appreciate
the machinery and systems in place to remove the hot metal from the furnace and subsequently
and shall be prosecuted.
From the visitors centre a safe route should be established to allow for people to enter the west
casthouse using the ramp on the north side of the slag pit.
Due to the inclined nature of the ramp this may not be suitable to lesser abled persons and an
elevator shall be considered to allow access to the casthouse from ground floor level.
A hardstanding shall require creating around the area of the west slag pits and shall incorporate
parking for buses etc.
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Exclusions
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Insurances
Maintenance works
Electricity (200kwh)
Total
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Approved
£75,000 / year
£212,000 / year
£285,000 / year
£185,000 / year
£225,000 / year
£982,000 / year
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Primetals Technologies Limited
Blast Furnace
Iron & Steel Making
3. Scrap processing
This is normally included in the demolition cost. But we can assume 7,500 tonnes
for processing in this instance. Typical rates, including transport, range from
£25.00-£35.00 per tonne, I’ve assumed £35.00 per tonne due the heavy duty
nature of the demolition and related metalwork.
Scrap metals processing cost: £0.26M
1
Cameras, cabling, etc: £0.05M
Security lighting: £0.05M
Alarm systems: £0.05M
Site security cost: £0.4M
6. Removal of foundations
This is assumed to be related to the removal of foundations connected with the
demolition of the peripheral assets. The area of such assets is around 20,000 sq.
m, assume 0.75m thick throughout giving £15,000 cu. m of concrete
Cost of foundation removal: £0.23M
Processing: £0.2M
Filling voids: £0.07M
Removal of foundations – cost: £0.5M