This service provider for mining and mineral processes covers the complete life cycle of all types of ore and invests in developing sustainable technologies. Reuben Ford describes the evolution of one of Brazil's most important industry partners.
Outotec is the global leader in minerals and metal processing technology and also supplies innovative solutions for alternative energy sources, industrial water treatment and the chemical industry.
The Finnish multinational has annual revenue of $2,880 million generated by 18 competence centers, facilities in 26 countries and sales in 80 different countries worldwide.
Present in Brazil for 25 years, Outotec offers the best available technology to the country’s rich mining industry, focusing on sustainability. Outotec Brazil is growing and adapting to local market needs.
“We are not the cheapest option in the market, but our solutions are made for life – guaranteeing technology and services for future generations,” says Lars Quaiser, Commercial Head for Outotec Tecnologia Brasil.
Two Become One
Outotec began life in Brazil as a small representative office (two people) of the Finnish mining company Outokumpu. The company, founded in 1910 had developed sophisticated production methods and already developed and built advanced flash smelting process for copper and was processing different metals in addition to copper. It brought previously unfamiliar processes to Brazil. “Breakthroughs in flash smelting, flotation and automation technologies inspired expansion overseas,” confirms Quaiser.
However, it was Outokumpu’s acquisition of Lurgi Metallurgie in 2001 that had a major impact on the product portfolio, complementing the non-ferrous metals (copper, zinc and nickel) with technologies for iron processing, alumina calcining and sulfuric acid processing. Lurgi had been strong in Brazil since the 1960s, working with national mining companies such as Vale.
“It was the big push that the company needed – strengthening our position in Brazil by broadening the range of metals, minerals and services and increasing market presence in Brazil (and elsewhere),” Quaiser comments.
It was clear that Brazil required turnkey solutions. The company in Brazil ran a complete processing project for Brazilian aluminum refinery Alunorte – the first in the country to operate this type of contract on this scale. As a result of the success, it was decided that the office in Belo Horizonte, Minas Gerais state, should be maintained as a project office and not only a representative.
Outokumpu’s technology business was organized as a legal consolidated group in 2006 and listed as an independent company on the Helsinki Stock Exchange, changing its name to Outotec.
Outotec built up knowledge and experience in Brazil without manufacturing or technology centers. “In Brazil, we have no extensive research and development facilities. Our technology and processes are developed in Finland and Germany – even in Australia – and applied and adapted locally,” Quaiser explains. Depending on demand, Outotec has created areas of expertise specifically for the Brazilian market.
Local testing facilities have been installed for some of these technologies. An agreement with the Federal University in Ouro Preto, Minas Gerais, allows access to research and laboratory facilities. Thanks to the partnership tailor-made solutions can be developed and tested.
“Although most of our solutions are imported, we have technologies such as sintering and pelletizing and have accumulated a vast knowledge in Brazil, enabling us to carry out most of our projects without major support from overseas. We are a technology company, not a production company – creating and applying solutions not manufacturing them,” Quaiser explains.
Outotec professionals from abroad often spend periods of up to six months in Brazil assisting in the implementation of projects and methods.
More than Iron Ore
Brazil is the second largest iron ore producer in the world and 80 percent of raw material exports are related to iron ore. Samarco and Vale are long-standing clients with enormous productivity; the latter processes 100 million tons of iron ore a year.
Quaiser points out, however, that “it’s not all about iron ore, despite it being the most important mineral in Brazil.” The country also has important bauxite alumina (used in aluminum production) refineries, as well as non-ferrous ore reserves and metal production facilities for nickel, zinc, copper and niobium.
With 84 percent of revenues dependent on mining and minerals, in particular iron ore, Outotec is working on new areas to balance income. “There are two main sources of additional business: water treatment and alternative energy,” Quaiser says. With Brazilian legislation for waste water treatment tightening, companies are being forced to step up. Neutralizing water pollutants to meet environmental discharge standards, maximize water recycling and reduce consumption are the objectives of Outotec’s treatment solutions.
The company is also investing in innovative technology to generate energy from various fuels such as biomass (sugar cane), coal, sludge, agricultural and industrial by-products as well as urban waste. One year ago Outotec began offering its energy-from-biomass solutions in Brazil, which are based on combustion of such fuel in the fluidized bed. Solutions for oil winning from oil shale and phosphorous recycling from sewage sludge ashes are also part of the new alternative energy division.
“We can’t ignore fertilizers,” Quaiser adds. “Brazil currently imports most of its fertilizers, containing reserves of ash and minerals. This is an area of future development – an opportunity – as we have the know-how to produce sulfuric acid needed in fertilizer production.”
Outotec’s main office in Brazil is in Belo Horizonte, Minas Gerais. With no manufacturing plants in Brazil, the Belo Horizonte office employees 110 staff and manages administration for the company in Brazil. Two years ago, a service center with staff in excess of 300 was opened to provide maintenance and spare-parts near Vitória in Espírito Santo, a location closer to many clients’ plants.
“We are analyzing further expansion opportunities near other clients. Our objective is to provide accessible service centers that can accompany and attend the entire life cycle of our equipment and solutions,” Quaiser says.
Purchasing premises and workshops does not prioritize new machinery. “Engineering, project management, construction management are the focus of investment and development. Outotec has the expertise to operate and supervise the turnkey solutions we offer,” he continues.
An example of an Outotec project is provision of technology for an iron-ore pelletizing plant that produces 9.5 million tons of iron ore pellets a year. “We are present from the conception and planning of the project to the construction, execution and maintenance,” Quaiser says. The $700-million-contract used Brazilian-produced equipment, with little need for importation, relying on a customized task force to implement such major projects. The project constitutes a huge logistics effort and is currently underway – due for completion in 2014.
Outotec rests on three pillars: large projects, equipment sales and services. In order to maintain a more balanced performance, the latter two must be improved – a focus of existing strategy.
Taking local restrictions in its stride, Outotec steps to the forefront of the industry. It is “a technical, sustainable leader who likes to accompany its projects and collaborate accordingly from beginning to end,” affirms Quaiser.
As Brazil leaps forward in terms of infrastructure, Outotec Tecnologia Brasil is a long-term partner for sustained success.