Miner Anglo American and German steelmaker Thyssenkrupp Steel have signed a memorandum of understanding to accelerate development of high-quality input stock for lower carbon steel production, using both conventional blast furnace and direct reduction iron, the companies said Oct. 20.
Thyssenkrupp said the new research and development work will focus on use of high-grade iron ore at its own installations, and will also involve working with partners.
“We want to decarbonize the steel value chain inside and outside our plant boundaries,” said Arnd Köfler, chief technology officer of Thyssenkrupp Steel. “We are setting up our own production with low-CO2 emissions through a combination of direct reduction plants with innovative melters. In addition, we are working with many partners to make steel lower in CO2 across the board.”
As part of its tkH2Steel project, Thyssenkrupp Steel’s coal-based blast furnaces will be replaced by hydrogen-powered direct reduction equipment. The iron produced by this equipment, directly reduced by hydrogen, will be liquefied in downstream, specially developed melting units to produce high quality hot metal, in what Thyssenkrupp maintains is a pioneering process. All subsequent production steps can take place in the existing plant structure, including the steel mills, allowing all the company’s products to be produced with low CO2 emissions, it said.
Thyssenkrupp recently released equity funds for construction of a first direct reduction plant at its Duisburg site, as part of an investment of more than Eur2 billion ($1.96 billion) in its “green transformation,” it said. The state government of North Rhine-Westphalia also intends to fund the project with an amount “in the mid three-digit millions,” according to the steelmaker.
The first direct reduction plant in Duisburg is scheduled to come on stream in 2026. The low carbon hydrogen-fueled direct reduction plant with downstream melters will have a capacity of 2.5 million mt/year and will avoid the emission of 3.5 million mt/year of CO2, according to information previously given by the company.
Thyssenkrupp Steel Europe is Germany’s biggest steel producer, with annual crude steel production of more than 11 million mt currently. It aims to produce 5 million mt/year of low-carbon steel by 2030, cutting emissions by more than 30%, and is targeting climate neutrality by 2045.
Miners target Scope 3 emissions cuts
Peter Whitcutt, CEO of Anglo American’s marketing business, said the miner is “combining the premium physical and chemical qualities of our minerals with thyssenkrupp Steel’s innovative technology to drive more sustainable operations.” High iron content ore with few impurities typically allows coal usage to be reduced in conventional steel mill blast furnaces.
In 2021 Anglo American set a target to reduce its Scope 3 emissions by 50% by 2040, building on a pre-existing commitment to reach operational (Scope 1 and 2) carbon neutrality by the same year. The majority of Anglo American’s Scope 3 emissions are linked to materials — steelmaking coal and iron ore — sold into the steelmaking industry, making decarbonization in the steel value chain central to the miner’s own decarbonization efforts.
Anglo American has now signed agreements with a number of major steelmakers in Europe and Asia to collaborate on decarbonization of the steelmaking industry, involving research on and supply of efficient feed materials suited to use in direct reduced iron steelmaking, including iron ore pellets and lump iron ore.
Iron ore miners Vale, Rio Tinto and BHP have also signed decarbonization research and collaboration agreements with major steelmaking groups worldwide in recent months.
Platts, part of S&P Global Commodity Insights, assessed hot-rolled coil in Northwest Europe up Eur10/mt Oct. 19 at Eur660/mt ($645.68/mt) ex-works Ruhr, in a subdued market. The price is down 28% since the start of the year. Iron ore prices are also down 22% from the start of the year on weakening demand. Platts 62% Fe Iron Ore Index was at $93.75/dry mt CFR North China on Oct. 19, down $1.05/dmt on the day amid a bearish market.
— Diana Kinch