Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japanese steel producer Kobe Steel has reached an agreement with Vale and Mitsui & Co to offer low CO2 iron metallics and iron making improvements for the steel industry.


The plan will offer reduced CO2 emissions compared to those produced using the blast furnace method, Kobe said in a news release.


Under the non-binding agreement, Brazil’s Vale will contribute to the venture with technological proficiency from its wholly-owned subsidiary, Tecnored, and its iron ore portfolio, while Mitsui will share its expertise in commercializing metals and scrap as well as its investments. 


Kobe, will contribute to the venture through its wholly-owned US subsidiary, Midrex to provide direct reduction ironmaking (DRI) technology, which uses natural gas, or gas resulting from coal, to condense iron ore for consumption in steelmaking. The Midrex unit accounts for over 60pc of global DRI production.


DRI is a raw material used in steelmaking by lowering iron ore and is largely used in electric arc furnaces as a scrap alternative or supplement to higher-quality scrap and basic pig iron. The material is also used, often in lesser quantities, in blast furnaces and basic oxygen furnaces. 


Midrex plants produced about 68mn mt of DRI in 2019. One of its latest modules includes the Cleveland-Cliffs’ 1.6mn mt per year HBI plant in Ohio. 


The steelmaking process is among the largest sources of greenhouse gas emissions even though steel is a central material to several infrastructure and consumer goods industries. Reducing the CO2 emissions from the steelmaking process is also a significant part of ongoing efforts to address climate change worldwide.

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