Developing
iron ore and metallic iron products which are optimized to enable
lower-emissions steel to come to the market remains a persistent challenge for
the steel and mining industry, supporting breakthroughs in hydrogen and direct
reduction using renewable power.
Iron ore
miners such as Rio Tinto, Vale, Fortescue and BHP are working with steel
companies in Asia and Europe to adapt products such as pellets, high-grade
concentrates, sinter and lump ore for use in direct reduction iron (DRI) and
blast furnaces to enable emissions reductions. High regulated carbon emissions
prices in Europe, and interest in lower-emissions steel for products has driven
interest in new steel investments and markets to reinforce emissions
benchmarking and taxation.
Adapting
iron ore and metallics specifications and product properties for iron ore and
steel processing using hydrogen and biomass, and less coal-based fuels, as well
as electrolysis, are among projects and initiatives being pursued in a drive to
slash steel industry emissions — which make up around 8% of total global
emissions. Hydrogen produced from a range of energy sources and the use of
carbon capture utilization and storage are also considered widely in Europe and
globally to help tackle emissions at coal and fossil-fuel dependent iron and
steel plants.
Rio Tinto, a
major producer of iron ore including pellets, concentrates and lump products,
and steelmaker Salzgitter Group said June 7 that it will look at iron ore
supplies and expanding processes and supply chains to support investments under
Salzgitter’s SALCOS project. The work will include technical, logistical and
grade-specific issues for low-carbon supply chains and lower emissions steel
production processes.
On June 3,
iron ore pellet producer LKAB and Salzgitter signed a technical cooperation
agreement.
“Very
high-quality iron ore pellets are required for the new steelmaking process via
SALCOS involving direct reduction plants and electric arc furnaces,” LKAB said
in a statement.
Rio Tinto
and other steel and mining groups have highlighted the need to adapt processes
for DRI plants which have traditionally run on reformed natural gas as new
plants are developed for 100% hydrogen-based reduction. Many such projects
expect to create hydrogen for DRI with electrolysis using renewable power from
wind and solar projects.
Optimizing
pellet quality and also the use of lump ore and other iron products when using
hydrogen rather than other fuels, along with supply chain carbon certification,
will be reviewed under Rio Tinto and Salzgitter’s memorandum of understanding.
Miner Anglo
American already regularly supplies high-grade South African lump to some DRI
plants such as those in Egypt, which have used lump in a smaller proportion
together with pellets. This may allow for a blended feedstock, saving
procurement costs and enhancing risk management as premiums for lump and
pellets may see disconnects on lump’s major pricing reference in China’s spot
market while contract pellet premiums are currently negotiated quarterly.
As European
integrated steel companies such as Salzgitter and Thyssenkrupp look to invest
in DRI and electric arc furnaces to offer low-emissions steel, a shortage of
low silica and alumina pellets with the optimal specification for DRI plants
has already pushed pellet premiums to record highs in the past year.
New pellet
plants are being developed in tandem with plans for DRI, which may increase the
demand for suitable concentrate and resources. Some of the pellet plants
announced will need seaborne imports.
Merchant
DR-grade pellet demand may increase to 53 million mt in 2025 from about 38
million mt in 2020, and rise to 81 million mt in 2030, according to December
2021 estimates from the International Iron & Metallics Association.
Around 28.5
million mt of estimated market-based DR pellet demand in 2030 is expected to
come from new DR plants, mainly in Europe and the Middle East and the North
African region, at which time supply could undershoot demand, according to the
IIMA’s figures.
Miners such
as Vale, LKAB and Rio Tinto’s Iron Ore Company of Canada are looking into
producing low-emissions iron products, which may compete with DRI and HBI
producers and consume pellets. Cleveland-Cliffs, Metalloinvest and
ArcelorMittal are already fully integrated, producing DRI/HBI and iron ore,
while Metinvest, and Russian steel and mining groups were earlier investigating
DRI projects.
Iron ore pellet alternatives
An
alternative to DRI plants and a reliance on DR pellets is molten oxide
electrolysis technology, which is set to be commercialized for steelmaking from
2025 onwards by Boston Metal and can use a range of iron ore products without a
DRI plant. Other projects such as Voestalpine’s HYFOR are designed for direct
reduction of iron ores without pelletization, and using hydrogen only, which
may ease difficulties in securing pellets.
Pelletizing
iron ore uses energy at the pellet plant, and the more concentrated the ore
feedstock the greater the need for beneficiation, grinding and sorting, with
additional energy, equipment, water and in some cases chemicals used.
Under plans
announced by several European companies including ArcelorMittal, hydrogen-based
DRI or hot-briquetted iron is expected to be fed into electric arc furnaces, or
melting modules, allowing further processing into steel. Renewable energy used
down the chain, and low-emissions solutions upstream in mining and logistics
may help minimize overall Scope 1-3 steel product emissions.
Currently,
the HYBRIT pilot plant in Sweden is producing iron using hydrogen, which is
being transformed into steel products by SSAB. The company said it is using EAF
facilities owned by research institute Swerim in Lulea and a third party to
melt the iron and combine necessary inputs prior to rolling the steel at SSAB’s
Oxelosund works for some of the trial grades supplied.
The newly
developed steel has been offered to customers such as the Volvo Group, with
SSAB expecting to move into full commercial production of low-emissions steel
once it has developed its own EAF in 2026.
Germany’s Thyssenkrupp
has launched lower emissions steel products under the ‘bluemint’ range using
its blast furnace-basic oxygen furnace works and is adapting feedstocks to use
HBI and greater volumes of ferrous scrap. Thyssenkrupp said it used HBI
directly in a blast furnace at Duisburg-Hamborn in 2021, which lowered the
coal-based fuel needed for producing pig iron.
ArcelorMittal
is producing a range of lower-emissions and certified flat and long steel
products in Europe and is investing in emissions reductions and producing
certificates for sale with its steel.