'Greater use of DRI technology' required for decarbonization goals, says report

The report, titled Solving Iron Ore Quality Issues for Low-Carbon Steel, was released on 9th August.

DRI does not use metallurgical coal, but currently relies on high quality DR-grade iron ore (above 67% purity), which is in short supply.

However, report author 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.

''Encouragingly, we found some steelmakers are now investigating and planning,” says Nicholas.

“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,” said Nicholas.

German conglomerate Thyssenkrupp is intending to replace the first of its blast furnaces with DRI plants combined with a submerged arc furnace (SAF) 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.

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.

Nicholas said BHP’s view ‘risks making it an industry laggard on decarbonization’, and the shift to DRI raises questions about BHP’s commitment to metallurgical coal in the long term.

“Any significant global switch from blast furnaces to DRI processes will impact metallurgical coal demand,” said report co-author Soroush Basirat. “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.’’

Source: Trade Arabia