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.
Russia
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.
Germany
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.
Sweden
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.
US
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
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.
Australia
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.
Expectations
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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.
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