August 2021
Direct reduced iron (DRI) plants are expanding in the global steel industry. The accelerating movement towards reducing carbon emissions, and the increase in the capacity of DRI modules have renewed interest in the sector. In addition, hydrogen reduction as a production facility has been also attracted focus. The DRI production process has been introduced mainly in oil-producing countries. Now it is spreading to other regions who are looking to slash their carbon emissions.

DRI production has exceeded the 100Mt level for the third consecutive year. In 2020, production totalled 107Mt, despite the impact of the covid-19 pandemic. AME expects DRI production will reach 135Mt in 2025 at a CAGR of 4.8%.



Historically, India and Iran are major DRI product countries, accounting for both ~30% of global DRI production output. Recently, production has started expanding throughout North Africa such as Egypt's Ezz Steel, Algeria's Algerian Qatari Steel (AQS), and Turkey-based Tosyali Holdings' Tosyari Algerie Iron Steel.



Metalloinvest has long been the centre of DRI production in Russia, as the company believes that premium pellets and HBI/DRI are the future of green steelmaking. Metalloinvest will be doubling down on its position as the largest producer of merchant DRI, by adding a 2Mtpa DRI/HBI plant at MGOK, to capitalise on its upgraded pellet products.

The plant is scheduled to be commissioned in the first half of 2024 with a total investment of more than RUB40b (US$550m). The company will have the ability to produce concentrate, BF grade pellets, DR grade pellets and HBI at all its mining complexes. In the meantime, it is expected that MGOK’s DR grade pellets will be sold in the merchant market and used by the company’s other facilities as required.  

Russian steelmaker NLMK Group has signed a Memorandum of Intent (MOI) with the Belgorod Region administration, and the Russian Ministry of Industry and Trade to construct a new metals and mining facility at the Stoilensky Mining and Beneficiation plant.

The project covers the expansion of the existing open-pit mine to increase iron ore output from 43Mtpa to 67Mtpa, the construction of new beneficiation capacities for a total of 10Mtpa of concentrate, a pelletising plant with a capacity of 9Mtpa of pellets, and a HBI plant with a capacity of 2.5Mt. Investment will total approximately RUB250bn (US$3.4bn). The project is planned to be implemented between 2024 and 2027, with commissioning scheduled from 2027-28.



The construction of Salzgitter’s μDRAL DRI Plant has commenced with a total of EUR13.6m (US$16m) investment. It is the first iron ore direct reduction plant with production capacity of 2.5tpd that would be designed to run on natural gas and hydrogen. It is expected that the first production will be seen in the first half year of 2022 and product DRI will be feed into the company's blast furnace to reduce PCI coal usage as well as into the electric arc furnace at the Peine plant. Salzgitter expects to fully convert its steelmaking process to hydrogen by 2050, which would reduce its carbon emission in steel production by ~95%.

ArcelorMittal is planning to build a large plant for DRI and electric arc furnace (EAF)-based steelmaking at its site in Bremen, as well as an innovative DRI pilot plant and EAF in Eisenhüttenstadt. Using green hydrogen, ArcelorMittal expects up to 3.5Mt of steel could be produced by the Bremen and Eisenhuttenstadt sites by 2030 - significantly lowering CO2 emissions. Depending on the amount of hydrogen available, ArcelorMittal anticipates CO2 savings of more than 5Mt from the new technology.

The technology conversion is expected to require investments in the range of EUR1-1.5b (~US$1.7b). In Germany, the group already operates Europe’s only DRI-EAF plant in Hamburg, where the switch to using hydrogen instead of natural gas in the iron ore reduction process is underway. The objective is to reach industrial commercial maturity of the technology by 2025, initially producing 100kt of sponge iron a year.

Thyssenkrupp Steel has a plan to transition four blast furnaces in Duisburg from BF pellet to DRI pellet from 2025, responding to the movement to reduce carbon emission. Thyssenkrupp said that EUR2bn (US$1.7bn) in investment will be required for implementation of the change by 2030 and up to EUR8bn (US$6.8bn) for the complete changeover.



SSAB, LKAB and Vattenfall announced that their joint owned HYBRIT pilot plant in Lulea, Sweden has produced the world’s first hydrogen DRI with fossil-free electricity. Trial production began at HYBRIT 's pilot plant in August 2020 and is planned to run until 2024. HYBRIT aims to substitute coking coal with hydrogen and create a value chain for fossil-free steel and reduce Sweden’s total carbon dioxide emissions by 10%.

The world’s fossil-free Industrial scale production with production capacity of 1.3Mtpa in Gällivare, North Sweden is scheduled to begin in 2026. The product from the demonstration plant will contribute to LKAB’s transition plan. It is expected to expand DRI pellet production to a full capacity of 2.7Mtpa by 2030, providing SSAB and other plants with feedstock for its fossil-free steel. The new plant will use the new technology of HYBRIT to remove the fossil fuel consumption.



Midrex was also adopted at the new DRI plant, which Cleveland Cliffs held a ceremony in June to celebrate six months of continued operation and production of HBI at its DRI plant in Toledo, Ohio. The plant has nominal capacity to produce 1.9Mtpa of customized high-quality HBI using natural gas-based iron reduction to supply HBI both internally to Cleveland-Cliffs and to third-party EAF mills.



China's Hesteel Group (HBIS) has also embarked on DRI using hydrogen. it will build a hydrogen based DRI plant with an annual output of 1.2Mtpa in Zhangjiakou City, Hebei Province. Currently there is no DRI plants in East Asian countries, including Japan, as these countries are traditional importers of LNG. The DRI plant will be the first gas based DRI plant in China. Compared with the traditional BF/BOF process, carbon dioxide emissions will be reduced by 40% to 60%.

The first stage of 600kt is planned to be put into operation at the end of 2021. After completion, it will be the world's first industrialized production plant using hydrogen-rich gas to produce DRI. The second stage of additional 600kt will use hydrogen as reducing gas generated by electrolyze water using wind energy, solar energy and other renewable energy realizing non-fossil energy smelting.



Iron Road Limited announced in January that the development planning for a green manufacturing precinct at Cape Hardy, South Australia, will commence. 

The Hydrogen Utility (H2U) will integrate an iron ore ‘green pellet’ plant fuelled by renewable energy, using high grade iron concentrate from the Central Eyre Iron Project (CEIP). This follows an extension to the company’s 2019 agreement with H2U that last year attracted Mitsubishi Heavy Industries Ltd—a leading Japanese multinational engineering, technology—as an investment partner.

Having secured this strategic investor, H2U is now able to accelerate its green hydrogen development projects in South Australia, including detailed planning for a green manufacturing precinct at Iron Road’s Cape Hardy port site. The plant’s production output will be 1–2Mtpa, which can reduce CO2 emissions to almost zero.



Most new projects are targeting annual output of 2.5Mtpa per unit. The future target is 3Mtpa per unit. The scale of hydrogen based DRI plants are still small, but this may be expanded going forward. As green steelmaking evolves, DRI has the potential to be a large market in the global steel industry.