According to a new report from the Institute for Energy Economics & Financial Analysis “Solving Iron Ore Quality Issues for Low-Carbon Steel” examines a number of new innovations in the industry that could accelerate the switch from traditional blast furnace technology to lower-emissions Direct Reduced Iron based steelmaking. DRI does not use metallurgical coal, but currently relies on high quality DR-grade iron ore of above 67% purity, which is in short supply. Report author Mr Simon Nicholas points to new technology combinations that allow DRI processes to use the more plentiful, blast furnace-grade ore, typically 62-65% purity, in the production of low carbon steel, thereby removing the need for high-grade iron ore. He said “Encouragingly, we found some steelmakers are now investigating and planning. This will potentially alleviate the DR-grade iron ore scarcity problem, aiding the expansion of low-emissions steelmaking technology that does not use metallurgical coal.”

German conglomerate Thyssenkrupp is intending to replace the first of its blast furnaces with DRI plants combined with a submerged arc furnace in 2025 allowing it to use blast-furnace grade iron ore in the process. The second largest steel producer in the world, ArcelorMittal is also planning to implement a similar DRI-SAF combination. In Australia, BlueScope steel is working with Rio Tinto on a similar combination of DRI with a melting step that would allow the use of Rio’s Pilbara blast furnace-grade iron ore in DRI processes. Meanwhile Italian steel technology provider Tenova is also developing new technology combinations to produce direct reduced iron using lower-quality blast furnace-grade pellets.

Report says “These developments run counter to the narrative of BHP, one of the key suppliers of blast furnace-grade iron ore and metallurgical coal to the steel industry, which has stated that there is simply not enough high-quality iron ore suitable for DRI-based production to meet global steel demand. BHP believes most of the world’s steel will still be produced via the traditional blast furnace-basic oxygen furnace route using coal in 2050. However, Bloomberg New Energy Finance sees DRI processes accounting for 59% of global primary steel production by 2050, on a net zero emissions pathway. BHP view risks making it an industry laggard on decarbonisation.”

Report co-author Mr Soroush Basirat says “Any significant global switch from blast furnaces to DRI processes will impact metallurgical coal demand. A greater use of DRI technology should be of particular concern to companies like BHP as the world’s largest producer of seaborne metallurgical coal. Major iron ore miners should start to reassess their long-term strategies and prepare to supply more of their products to DRI-based steelmaking processes. Technology pathways that can use lower-grade ore in DRI processes can allow iron ore miners to increase their Scope 3 emissions reduction ambition. Given that technology transitions have a history of surprising speed, we may well see accelerating technology developments start to threaten metallurgical coal’s incumbency over the coming years as the steel industry continues to innovate.”

The Institute for Energy Economics and Financial Analysis examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

BaoSteel Develops Corrosion Resistant Composite Steel Plates

Strategic Research Institute

Related Stories