Rio Tinto, Paul Wurth S.A. and SHS-Stahl-Holding-Saar GmbH & Co. KGaA (SHS) have signed a Memorandum of Understanding to explore the viability of transforming iron ore pellets into low-carbon hot briquetted iron (HBI) (a form of Direct Reduced Iron, DRI), a steel feedstock (earlier post) using green hydrogen generated from hydro-electricity in Canada.

This partnership brings together a leading global miner, an international leader in the design and supply of engineering solutions for integrated steelmakers and one of Europe’s best-known steelmakers.

HBI is conventionally produced by reducing iron ore with natural gas. The HBI can be used in electric arc furnaces (EAF) to replace scrap metal or in blast furnaces to replace coke (produced from coal) and iron ore.

Iron Ore Company of Canada (IOC), in which Rio Tinto holds a majority interest, will supply high-grade iron ores and expertise in mining, processing and pelletizing. Paul Wurth brings expertise in plant building and process knowledge in the field of highly efficient hydrogen generation and MIDREX direct reduction plants. SHS brings deep iron and steel making expertise.

While the natural gas-based MIDREX Process paired with an EAF has the lowest CO₂ emission of any steelmaking route using iron ore, there is room to further decrease emissions by using hydrogen as a fuel and chemical reactant in the process.

In 2019, ArcelorMittal commissioned Midrex Technologies to design a demonstration plant at ArcelorMittal’s Hamburg site to produce steel with hydrogen. The first Project Development Agreement is to demonstrate in Hamburg the large-scale production and use of Direct Reduced Iron (DRI) made with 100% hydrogen as the reductant.

That demonstration plant will eventually produce about 100,000 tons of direct reduced iron per year—initially with grey hydrogen sourced from natural gas. Conversion to green hydrogen from renewable energy sources will take place once available in sufficient quantities and at an economical cost. The plant will be the world’s first direct reduction plant on an industrial scale, powered by hydrogen. (Earlier post.)

Rio Tinto’s significant presence in the Canadian provinces of Québec and Newfoundland and Labrador makes Canada a natural location for the project. Canada provides access to cost competitive hydro-electricity, and proximity to key markets in Europe and North America. Transforming high-grade iron ore pellets into a low-carbon steel feedstock using green hydrogen, when processed in an electric arc furnace with carbon free electricity, has the potential to reduce significantly the carbon emissions associated with steelmaking.

The parties will conduct a feasibility study into the potential development of industrial scale low-carbon iron production in Canada, utilizing the combined expertise of the three partners across the entire steel value chain. The feasibility study is scheduled for completion in late 2021, with an investment decision on a hydrogen-based direct reduction plant at industrial scale expected to follow thereafter.

Dillinger and Saarstahl adopted a future-focused strategy with the motto ‘proactive, carbon-free and efficient’. Within this strategy, we have defined various options for the transformation to carbon-neutral steel production. The use of hydrogen in steel production is a key factor in reducing carbon emissions. This partnership can further help us to reduce our carbon emissions on the basis of this technology, while gaining important experience in using hydrogen in steel production.

—Martin Baues, Member of the Board of Directors for Technology at SHS-Stahl-Holding Saar

The Paul Wurth Group is a leading player in the design and supply of the full-range of technological solutions for the primary stage of integrated steelmaking. Paul Wurth is a company of SMS group. A special focus is on the construction and modernization of complete blast furnace and coke oven plants, incorporating the very latest technologies. Its portfolio also extends to direct reduction plants, environmental protection technologies as well as recycling facilities.

SHS - Stahl-Holding-Saar GmbH & Co. KGaA (SHS), which was founded in 2001, is the management holding of the two large Saarland-based steel companies. Dillinger is a worldwide leader in the production of heavy plates made of steel for steel construction, mechanical engineering, off-shore, offshore-windpower and the linepipe sector. Saarstahl is a globally leading manufacturer of rod and bar steel for the automotive industry, the construction industry and general machinery. Around 13,500 employees work within SHS and generate a turnover totalling around €4.5 billion.