H2 Green Steel forges iron ore deals with global mining giants
H2 Green Steel has finalised long-term deals with mining giants Vale and Rio Tinto.
H2GS announced on Wednesday that it will source iron ore pellets from Canada and Brazil. The company, however, has not disclosed the value of its deals with Vale and Rio Tinto.
The deals also include Rio Tinto purchasing and reselling some of the low-carbon hot-briquetted iron (HBI) produced during H2GS’s ramp-up phase.
H2GS plans to construct a low-carbon steel plant in Boden, Sweden, by 2025. The company believes that the contracts signed with the two mining companies will be vital in securing funding for the project.
Vale has arranged to transport the pellets from Tubarão, Brazil, to Boden through Sweden’s Port of Luleå.
“This is a significant milestone for our project in Boden,” H2GS CEO Henrik Henriksson said. He emphasized the importance of securing a reliable supply of “high-quality iron ore” for the company’s green steel production.
He remarked that Rio Tinto holds a significant position within the mining sector, highlighting its commitment to accelerating the steel industry’s decarbonisation.
“We are partnering across the steel ecosystem to find better ways to support the decarbonisation of iron and steel making, and to reduce our scope 3 emissions,” he said.
Seeking Swedish suppliers for lower transport emissions
While the company is sourcing pellets from global suppliers, it is also seeking to purchase direct reduction pellets from Swedish sources to reduce emissions from transportation.
Henriksson explained that additional evaluations were required to determine the shipping capabilities of Swedish mines to the H2GS plant. He said discussions were underway with various entities, including LKAB and Kaunis Iron.
He added that the company hopes to form partnerships with multiple companies to secure the supply of iron ore for the product in northern Sweden.
“But also to have possibilities for our projects outside Sweden and work with these partners,” he said,
Henriksson acknowledged that 50 kilograms of CO2 emissions would result from transporting materials from the Americas. However, he highlighted that this would be offset by a large margin, thanks to his company’s direct reduced iron (DRI) production method, which cut CO2 emissions by up to 1,900 kilograms per tonne of finished steel.
“Long term, we need to find ways to get rid of those 50 kilos, but short term it’s a smaller part of the big impact we are doing,” Henriksson said.
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