In order to supply direct reduction iron ore pellets for its green steel manufacturing in Sweden, H2 Green Steel has partnered with Rio Tinto, a major international metals and mining corporation.
In order to provide direct reduction iron ore pellets (DR Pellets) from Rio Tinto’s Iron Ore Company of Canada (IOC) to H2 Green Steel’s flagship plant in Boden, Sweden, the two businesses have inked a multi-year supply deal. Additionally, an agreement between the two parties was signed, under which Rio Tinto will buy and resell a portion of the excess low-carbon hot briquetted iron (HBI) that H2 Green Steel produces as it ramps up its steelmaking capacity.
DR Pellets are a crucial component needed for the manufacturing of high-grade HBI, which is then utilised in electric arc furnaces to create steel with lower emissions. The production of steel, a key component of infrastructure and the transition to net-zero energy, now accounts for about 8% of world carbon emissions.
“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. Our supply of high-grade iron ore pellets will support the acceleration of H2 Green Steel’s project, and on-selling their low-carbon HBI will enable us to gain a deeper understanding of the future needs of our customers and end users in the emerging green iron and steel market”, said Simon Farry, Head of Rio Tinto Steel Decarbonization.
The fully integrated, digitalized, and circular facility that H2 Green Steel is building will go into operation in 2025. It will mark the first significant global production of green steel. One of the largest electrolysis plants in the world for the production of green hydrogen will be located in Boden, in northern Sweden. Iron ore will be reduced using hydrogen to produce green sponge iron. CO2 emissions from the process can be decreased by switching to green hydrogen instead of coal.
“This is a significant milestone for our project in Boden. Not only by securing a supply of the high-quality iron ore needed for our green steel production but also because we have a buyer for a portion of the HBI we initially expect to produce. Rio Tinto is a global leader in the mining industry and we welcome its concrete actions to accelerate the decarbonization of the steel industry,” says Henrik Henriksson, CEO at H2 Green Steel.