Kobe, Vale and Mitsui to collaborate on low-CO2 ironmaking solutions

Kobe Steel Ltd. of Japan, the parent company of Charlotte, North Carolina-based direct-reduced iron (DRI) producer Midrex Technologies Inc., says it has reached a nonbinding agreement with Vale S.A., the world’s largest iron ore producer, and Mitsui & Co. Ltd., a global trading and investment company, to collaborate in providing low-CO2 metallics and ironmaking solutions to the global steel industry.

According to a news release from Rio de Janeiro-based Vale, under the agreement, the partners will establish a new venture to supply low greenhouse gas (GHG) emissions metallics and steelmaking solutions.

An evaluation period has begun to deepen the cooperation and to gauge market demand for several existing and new steelmaking solutions prior to a final agreement for the creation of the new venture, Vale says. The company adds that the new venture will use existing and new low-CO2 iron-making technologies, such as Tecnored Technology and Midrex Process.

Tecnored is a 100 percent owned Vale subsidiary focused on developing a low-carbon pig iron process using biomass, syn-gas and hydrogen that emits less CO2 than the coal and coke the tradition ironmaking processes. Using biomass, the path to economic carbon neutrality may be achieved in the medium term, Vale says.

Midrex is a market leader in DRI technology. The CO2 emissions produced in the Midrex process using natural gas and hydrogen are dramatically lower than the blast furnace route, the company says.

“We are excited to provide Midrex Technology using both natural gas and hydrogen to help steelmakers mitigate CO2 emissions and transition from aging blast furnace technology,” says Stephen C. Montague, president and CEO of Midrex Technologies Inc.

This initiative fits with the vision and mission of Kobe Steel and Midrex. Kobe’s various product initiatives support GHG reduction. The company’s high-tensile-strength steel sheets for automotive weight reduction are directly linked to lower CO2 emissions and improved fuel economy, the Midrex news release states. 

An analysis by an Arlington, Virginia-based investment bank predicts that “a critical shift is underway” that will see electric arc furnace (EAF) steelmakers in the United States begin to seek out domestically sourced ore-based metallics (OBMs). OBMs include DRI, hot-briquetted iron (HBI) and merchant pig iron.

The 15-page analysis by B. Riley FBR Inc. sees increased demand for HBI and DRI in part because of new EAF melt shop capacity that is under construction and because of a potential scarcity of prime grades of ferrous scrap.