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August 09, 2010 02:00 AM

Horsehead plant explosion kills two, causes zinc oxide shortage

Mike McNulty
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    PITTSBURGH—An explosion at Horsehead Corp.'s Monaca, Pa., zinc refinery has temporarily halted production of zinc oxide pending completion of two investigations.

    The July 22 blast resulted in two fatalities and injuries to two other workers at the refinery, which produces zinc oxide—used extensively by rubber product manufacturers and, in particular, tire makers—and refined zinc metal.

    Horsehead, a subsidiary of Horsehead Holding Corp., declared force majeure for zinc oxide within a week after the explosion. “We're trying to work with customers to mitigate any problems they may have,” including matching some with other suppliers when necessary, a company spokesman said.

    The impact of the plant explosion on zinc oxide supply in the market will be immediate, according to James Glauser, a senior consultant with SRI Consulting. He said the market could be short of zinc oxide for four to six months, with other producers of the material all running at 100 percent of capacity.

    Prices for zinc oxide also are starting to rise—in some cases dramatically—and the market likely won't settle down until 2011, Glauser said.

    The two injured employees were treated and released from local hospitals, the Horsehead spokesman said. Fatally injured were Jim Taylor and Corey Keller.

    “We are deeply saddened by the loss of our co-workers and most concerned about our employees and their families; our initial efforts are directed to helping them,” President and CEO Jim Hensler said in a July 23 statement.

    A preliminary assessment of the blast's cause indicates the explosion apparently occurred in one of the refinery's 10 columns used to produce zinc oxide. That column suffered the most damage, according to the spokesman, but because the power had to be turned off in the refinery, the remaining nine columns cooled too quickly and have to be rebuilt, he said.

    A primary investigation is being handled by the U.S. Occupational Safety and Health Administration and the U.S. Chemical Safety and Hazard Investigation Board. Parent Horsehead Holding's insurance underwriters and the company are conducting a separate probe. The United Steelworkers union, which represents plant workers, also is participating in the investigations.

    The rebuilding process likely will be delayed pending results from the investigations to ensure that the plant is safe. The probes could take a week or two, the spokesman said, and it's unknown at this point when the rebuilding process can begin.

    It's conceivable it could be several months before the refinery is up and running again at full capacity, he said, although it could be sooner than that. The full financial impact caused by the explosion has yet to be determined.

    Pittsburgh-based Horsehead expects the cost of the repairs and the loss of revenue during the rebuilding period from its zinc oxide sales, which normally represent about 40 percent of its revenues, will be partially offset by increased metal sales and will be covered by insurance.

    The firm's smelting operation and other units at the Monaca facility remain active, the company said, but are operating at reduced rates, with the smelting site using five of six furnaces to produce zinc metal.

    Until the full extent and timing of repairs is known, Horsehead said that all employees at the Monaca plant will remain on the payroll and continue to receive benefits. Horsehead employs about 1,000 at seven facilities throughout the U.S.

    Bruce Meyer, Rubber & Plastics News staff, contributed to this report.

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