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Thursday, 3 November 2022

Brazil’s Vale kicking tires on USD 1 bn ‘green’ steel plant in KSA

Brazil and KSA explore green iron production in Saudi: Saudi Arabia’s National Industrial Development Center (NIDC) and Brazilian mining group Vale signed an MoU during Saudi Arabia’s Future Investment Initiative last month to study establishing on a USD 1.1 bn iron ore pellet “mega hub,” S&P Global reports, citing the NIDC.

The details: The plant would produce 4 mn tons of iron ore pellets annually in KSA’s Ras Al-Khair industrial zone, S&P Global reports. Vale will build and operate the iron ore concentration and briquetting plants within the hubs while companies in KSA will land contracts to build out logistics infrastructure, according to a company statement. Timelines for construction and funding details are yet to be announced.

How is the ore green? Vale produces hot briquetted iron using natural gas, emitting up to 60% less carbon, and the replacement of natgas with hydrogen, coupled with the use of renewable energy, could eliminate carbon emissions altogether, according to the statement.

KSA’s steel production is ramping up: The Kingdom’s crude steel production increased by 3.1% y-o-y in 9M 2022, S&P reports, citing figures from the World Steel Association. Saudi Arabia currently has a capacity of 16 mn tons per year, which it produces via a process called Direct Reduced Iron. The new plant will increase the peninsula’s steel capacity to drive the construction and industry sectors forward.

Regional plans in the pipeline: The mining company also has separate MoUs with the UAE and Oman. Vale will study the feasibility for iron ore pellet mega hubs with the UAE’s Steel Arkan (ESA) — which has been trying to “greenify” the steel industry — and with Oman’s Commerce and Industry Ministry.

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