Vale to develop low-carbon iron in Brazil, US and Middle East within a year

Vale (NYSE: VALE) expects to start building in the next six months or a year its “mega hubs” to make low-carbon iron ore products for the steel industry.

According to Ludmilla Nascimento, the company’s director of Energy and Decarbonization, areas in Brazil, the United States and the Middle East are being analyzed.

In the Middle East, three projects of this type were already announced for Oman, Saudi Arabia and the United Arab Emirates.

“We have more than 50 memorandums of understanding signed with customers. So, we imagine that these projects will advance in the next six months to a year,” she said.

Vale is expected to build and operate iron ore concentration and briquetting plants at the hubs, and its local partners will build the required logistics infrastructure.

Hydrogen fuel

While operations in the Middle East will initially be powered by natural gas, the miner is studying the use of green hydrogen in Brazil.

“Brazil is not going to start with natural gas,” Nascimento said. “Here, we will start with hydrogen. We have this possibility due to the country’s competitiveness in energy. The idea is to create these hubs to produce this low or almost zero-carbon product and export it.” 

The traditional steel industry uses iron ore and coke (coal), which produces a high degree of carbon emissions. For each ton of steel produced, two tons of CO2 are emitted into the atmosphere.

“When you go the electric route, it drops to a ratio of one ton of steel to 1 ton of CO2 if natural gas is used and to zero if hydrogen is used,” she said.