São Paulo – Brazilian mining company Vale signed a letter of intent with Indian steel group Essar, establishing a partnership to supply iron ore agglomerates to Essar’s Green Steel Arabia (GSA) project in Saudi Arabia. Under the agreement, Vale will supply four million tonnes of agglomerates a year. Pictured above, Vale’s production in Brazil, in the state of Pará.
According to information disclosed by the Brazilian company, the clusters could be pellets or briquettes. Vale stated it would produce the briquettes at its Mega Hub in Saudi Arabia, where the customer is also located, and the pellets could be made by the company in Brazil or Oman, a country in the Middle East where Vale already has operations.
Last year, Vale announced agreements for establishing Mega Hubs in Saudi Arabia, the United Arab Emirates, and Oman. Vale is responsible for building and operating iron ore concentration and briquetting plants in these plants, ensuring the supply of high-quality agglomerated products. Local partners are responsible for building the necessary logistics infrastructure, and investors and customers build and operate direct reduction plants and purchase hot briquetted iron (HBI) for export and domestic supply.
Announcing the Mega Hubs, Vale informed that in addition to HBI, other steel products would be produced in these locations with significantly reduced carbon dioxide (CO2) emissions. The production of HBI using natural gas emits approximately 60% less CO2 than pig iron production through the integrated BF-BOF route. In the future, replacing natural gas with hydrogen and using renewable energy could neutralize CO2 emissions.
“This agreement represents an important step in the development of Mega Hubs, an innovative business model that aims to support the decarbonization of the steel sector and contribute to the global fight against climate change,” said Vale’s vice president of Iron Ore Solutions, Marcello Spinelli. Essar’s GSA aims to be the first green steel initiative in the region. Last week, Vale announced an agreement to study the development of industrial complexes similar to Mega Hubs in Brazil and North America.
Translated by Elúsio Brasileiro
