Steel producer and miner, ArcelorMittal has signed a memorandum of understanding (MoU) with the Government of Spain that covers €1bn ($1.18bn) in funding toward decarbonization efforts at its Asturias’ plant in Gijón.
The investment will fund the construction of a 2.3mn mt green hydrogen direct reduced iron (DRI) mill and a new 1.1mn mt hybrid electric arc furnace (EAF) at the site. The DRI produced at Gijón will transfer to the company’s nearby Sestao plant to provide feedstock for its two EAFs as production at that site only uses this method.
The Gijón plant will move away from its current blast furnace-basic oxygen furnace steelmaking production method and switch to DRI-EAF production, which entails a considerably reduced carbon footprint.
With the DRI and EAF installation investments in Gijón, the company will also devote €50mn at Sestao for the technology needed to reach zero carbon emissions, while holding 1.6m mt of output at the plant.
The new DRI and EAF, which marks the first of their kind in the country, are slated for production by the end of 2025.
The investments will cut CO2 emissions at the steelmaker’s Spanish operations by up to 4.8mn mt or about 50pc of emissions, over the next five years.
To boost the company’s ability to cut emissions, green hydrogen will eventually lower iron ore used in the DRI, while the EAF will run on renewable electricity.
Arcelor Mittal reached crude steel output of 71.5mn mt and iron ore production of 58mn mt in 2020.