Inside Vale’s green briquette megahubs and how they will work

This is because China — the largest steelmaker and raw material consumer in the world — continues to favor the blast furnace route for steelmaking due to its efficiency and economies of scale. Consider these factors alongside the relative young age of many large blast furnaces in the country — which means that steelmakers would be unlikely to abandon them in the mid- or long term — and efforts to drive the adoption of electric-arc furnace (EAF) progress only slowly.

Vale's efforts also support the steel industry's drive toward eliminating Scope 3 emissions, which remains a tall order in the near- and mid-terms. It hopes for a 15% reduction in emissions from its own value chain by 2035, and to achieve net-zero carbon emissions by 2050.

The miner is planning three megahubs in Ras Al-Khair Industrial City in Saudi Arabia, the Khalifa Economic Zone in Abu Dhabi and at Duqm in Oman. It will supply concentration fines to these hubs and then beneficiate them into pellet-feed concentrates, which will then be processed into briquettes.

It will build and operate concentration and briquetting plants within these hubs, to provide a regular supply of high-grade agglomerated products to downstream consumers. Vale expects iron ore fines from all its systems in Brazil to contribute to the blend that will compose the feed for the concentrators.

Vale sees its green briquettes as versatile and able to support its buyers’ decarbonization goals.

"Vale's green briquettes are produced with very flexible and low-carbon technology. Since it is an agglomerate from iron ore fines, the resulting direct-charge material has all the necessary attributes to be used directly in conventional, mature and existing ironmaking reactors such as blast furnaces and direct-reduction furnaces," executive vice president for ferrous minerals Marcelo Spinelli told Fastmarkets.

"The green briquettes being produced with our high-grade iron ore will also allow high furnace performance with lower slag volumes, and this is totally aligned with our customers’ decarbonization goals," Spinelli added.

Vale is also confident of the production process because of internal efficiencies and product flexibility.

"Industrial trials of briquettes were done with several customers and achieved good results. Binder material availability is manageable mainly because we can use sand from our own iron ore concentration process," Spinelli said.

"While a cold agglomeration process can be applied in different forms, such as pellets and extruded agglomerates, we have selected a briquetting process because it is the most flexible solution, considering iron ore feed and processing characteristics," he added.

Vale's investors and clients will construct and operate the plants that will produce hot-briquetted iron (HBI) or any other steel product. Similarly, investors and clients will then offtake the briquettes. Local parties will promote the construction of the required logistics infrastructure, and attract or invest in renewable and hydrogen production.

"Vale's green briquette production is expected to feed the HBI and other steel products plants that will be constructed in the megahubs. There is no expectation of exporting green briquettes to other markets," Spinelli said.

The capacities of each hub were still being studied, he added.

Saudi Arabia's National Industrial Development Center has signed a Memorandum of Understanding with Vale to develop a 4 million tonne per year iron ore pellet plant in Ras Al-Khair Industrial City, it said.

Vale's efforts shine a spotlight on the increasing emphasis on metallics and direct-charge materials in the steel industry. This is happening even as Asia continues to try to move up the value chain to emulate European steelmakers, which have a higher ratio of direct-charge materials in their furnace burden, or the US, where steel production is based largely on EAFs.

But the supply quantities of metallics and direct-charge materials to be fed into Asia's major blast furnaces are still low, and will not be achievable on a sustainable, economic scale any time soon, especially because high-grade pellet-feed iron ore concentrates remain tight.

This is why miners are also studying and experimenting with the agglomeration of lower-grade iron ore fines in hopes of producing them on a large scale, including from 60-62% Fe sinter-grade fines.

Equipment maker Metso Outotec told Fastmarkets that the scarcity of the required high-grade concentrates will remain the main bottleneck for the expansion of the direct-reduced iron-EAF route of primary steel production, and that improving technologies will make it a reality.

"Technology developments for smelting reduction are required," Metso Outotec business support specialist Richa Sharma said. "We recently launched a proprietary direct-reduction iron smelting technology, which — if used in combination with 100% hydrogen-based Circored direct-reduction technology — will accept lower-grade iron ores as well."