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11 September 2023 | News

H2 Green Steel and Vale explore USD 1.7 billion hydrogen project in Brazil

H2 Green Steel and mining giant Vale are exploring the possibility of building a hot briquette iron (HBI) plant in Brazil, according to a Memorandum of Understanding (MoU). The plant would use iron ore briquettes produced by Vale as raw material.

H2 Green Steel and Vale explore USD 1.7 billion hydrogen project in Brazil

HBI is a steel intermediate used mainly for producing carbon dioxide-free steel in electric arc furnaces (EAFs). The plant would run on clean hydrogen.

Direct Reduced Iron (DRI) is obtained by directly reducing iron ore in a solid state with carbon monoxide and hydrogen from natural gas or coal. HBI is a high-quality form of DRI that reduces the problems associated with transporting and handling DRI. The densification process makes it less porous than DRI and, therefore, much less reactive than DRI, and it does not have the same risk of self-heating as DRI.

According to preliminary estimates, the total value of the investment would be USD 1.7 billion. This would include a 1 million tonne HBI plant and a pure hydrogen production plant. If the HBI plant becomes larger than this, the total investment could exceed USD 3 billion.

Vale has set a target to reduce direct and indirect CO2 emissions by a net 33% by 2030 and to reach zero by 2050. The steel industry accounts for around 8% of global CO2 emissions.

H2 Green Steel of Sweden has started construction of the first green hydrogen steel plant in Boden, Sweden. Earlier in July 2023, Vale and H2 Green Steel signed an agreement to supply Vale's direct pellet to the Boden plant. Vale expects to reach a production capacity of 100 million tonnes of briquettes and pellets after 2030. 

Read the article on Valor.

Read H2 Green Steel's press release.