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Iron ore miner Anglo American and German steel group Salzgitter will work together to optimize high-grade iron ore supplies for low-emissions steel, as direct-reduction plants replace blast furnaces, the companies said Aug. 4.
Salzgitter AG’s subsidiary Salzgitter Flachstahl GmbH signed a memorandum of understanding with Anglo to study iron ore qualities and processes to enable the transition to low-emissions steelmaking, the German company said in a press release.
“The primary aim of the joint research activities is to minimize the CO2 footprint of steel production,” Salzgitter said. “The MOU also covers an examination of the lowest possible CO2 process and supply chains.”
Salzgitter is developing a 2 million mt/year DRI plant under the SALCOS project and has plans for an iron ore pelletizing plant, under feasibility studies for Wilhelmshaven harbor, Northwest Germany. The feasibility study was due to be completed in March and presented. Salzgitter did not immediately respond to queries on the study’s findings and progress when contacted Aug. 4.
Anglo is a long-standing major supplier of high-grade iron ore products to Salzgitter and working together will allow for joint studies and potential projects, said Ulrich Grethe, CEO of Salzgitter Flachstahl.
Anglo produces a number of lump ores and fines in South Africa through its Kumba Iron Ore subsidiary, while at Minas-Rio in Brazil the company markets iron ore concentrates typically used for pellets, as well as high-grade sinter feed.
Low alumina and silica pellets and a smaller ratio of lump ores can be used as optimal feed for DRI plants, according to technology supplier Midrex.
DRI plants’ iron products, including easier to transport hot-briquetted iron, are further processed into steel via both the electric arc furnace and blast furnace routes.
“The two companies intend to conduct research into feed materials, including iron ore pellets and lump iron ores, suitable for use in direct reduction steelmaking based on natural gas and hydrogen,” Anglo said in its statement. “The collaboration may also explore developing broader hydrogen technologies.”
Salzgitter, which has 7 million mt/year crude steel capacity and buys coking coal and met coke, plans to gradually replace blast furnaces from the middle of this decade through to 2045 with several DRI plants, initially fueled by natural gas and later hydrogen.
Going forward, hydrogen production and new EAFs are to be operated exclusively using renewable power, allowing carbon emissions from steel production to be reduced by 95% by 2045, it said.
The new DRI and EAF production changes underway “place special requirements on raw material properties, their treatment processes and logistics,” Salzgitter added.
“We are committed to collaborating with industry-leading players like Salzgitter Flachstahl to develop strategies that capitalize on the premium quality properties of our products to help drive emissions reduction across the entire steelmaking sector,” Anglo’s CEO for marketing Peter Whitcutt said in the company’s statement. “The MOU reinforces Anglo American’s existing commitments to the steelmaking industry, ensuring that we continue to provide high quality iron ore products that help drive efficiency and minimize emissions while new technologies are developed to achieve lower carbon steelmaking.”
Anglo highlighted its longstanding advocacy for hydrogen’s growth and role in decarbonization for sectors such as steelmaking, transportation and industrial processing, through its platinum business, as the precious metal is used in hydrogen fuel cells.
Iron ore pellets
Salzgitter currently buys iron ore pellets for its blast furnaces, and a change to producing its own pellets will lead the company to join steel and DRI producers like Tosyali Algerie, AM/NS India and Tata Steel Europe with captive pellet plants, procuring iron ore concentrates.
Salzgitter has commissioned Tenova for a demonstration DRI plant at its Salzgitter works with a 912,500 mt/year capacity to run on gas and hydrogen. DRI from this new unit is expected to come onstream in the first half of 2022 for use in the blast furnace to save on pulverized coal injection, and in the EAF at Peine nearby.
Salzgitter’s EAF-based subsidiary Peiner Trager produces a range of long steel and special products at Peine, and has supplied EAF-based slabs to Salzgitter Flachstahl for producing lower-emissions flat steel products. Automaker Mercedes-Benz and steelmakers such as ArcelorMittal and SSAB are also testing market demand and premiums for low-emissions steel.
Current hydrogen prices in Europe using renewables have increased this year through to July due to higher power prices and current electrolyzer efficiencies.
Quantities of hydrogen required increasingly pushed up DRI costs using the fuel compared with natural gas, according to S&P Global Platts green hydrogen prices for the Netherlands, and Platts DRI cost estimates.
Record-high iron ore pellet premiums and prices have further pushed up DRI costs, while blast furnace operators may have greater cost flexibility over iron ore grades and metallurgical coals.
Source: Platts