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in Commodity News 24/10/2022
Eyeing the massive steel decarbonization potential in China, global mining companies are stepping up efforts and investment for low-carbon solutions along the steel value chain in the country, and are establishing cooperation with more local partners, analysts said.
“Overseas miners are motivated to collaborate with Chinese mills to help develop technologies for carbon reduction in their production, as more than 70 percent of the total iron ore demand is met by overseas suppliers,” said Zhu Yi, a senior analyst with metals and mining at Bloomberg Intelligence, a market monitor.
“Enhanced cooperation between mills and overseas suppliers will further boost the carbon reduction progress from the raw material side and through to the production process,” Zhu said.
Her comment came after global metals and mining giant Rio Tinto Group announced on Sept 22 that it had inked a memorandum of understanding with Shougang Group, a major steel producer, to jointly promote the research and development, design and implementation of low-carbon solutions for the steel industry.
The MoU’s focus areas include low-carbon sintering technology, blast furnace (BF) and basic oxygen furnace optimization, and carbon capture and utilization, it said.
The partnership with Shougang underlines Rio Tinto’s strategic commitment to partner with customers on steel decarbonization pathways and to invest in technologies that can deliver reductions in steelmaking carbon intensity, said the company in a release.
Steel is a vital material for economic growth and low-carbon infrastructure, and Rio Tinto wants to play a role as an industry partner to support the decarbonization of steel, said Rio Tinto Chief Commercial Officer Alf Barrios.
Rio Tinto is not alone. Brazilian mining giant Vale SA said that it is already cooperating with some 30 steel companies to pursue iron-making solutions focused on fewer emissions, including many leading Chinese steel companies.
The latest MoU signed in China was with Fujian Sansteel Group Co Ltd and Xiamen ITG Group Corp Ltd in June. The companies will jointly explore and study iron ore solutions, develop customized iron ore products for Sansteel Group, and discuss the possibility of cooperating on concentration businesses.
BHP, an Australian mining company, signed a three-year cooperation agreement in November with Hegang Group Co Ltd and Beijing University of Science and Technology to jointly carry out R&D on technologies related to low-carbon steel production.
This is after BHP’s announcement of a three-year $15 million investment plan to jointly study and explore greenhouse gas emission reduction technologies with Hegang Group in March 2021.
Zhu said China’s commitment to its carbon goals could motivate steel mills to upgrade production lines and invest in green technologies such as hydrogen iron-ore reduction for BF, which encourages cooperation between mills and miners on process optimization.
“Though the carbon reduction projects may incur higher operational, R&D and capital expenditures, most major Chinese steel mills have set their carbon reduction timelines and carbon neutral targets. The sector accounts for 7 percent of global emissions, as producing 1 metric ton of steel generates 1.8 tons of greenhouse gases.”
He Jiankun, head of the Institute of Low Carbon Economy at Beijing-based Tsinghua University, said decarbonization technologies and low-carbon development capacity will become the core competition for a company as well as a country, while green and low-carbon transition and upgrading is the only way for the high-quality and sustainable development of the steel industry.
The steel industry in China has achieved remarkable results in energy conservation and carbon reduction, and the energy intensity and carbon emission intensity per product unit continued to decline, He said.
Li Xinchuang, chief engineer of Beijing-based China Metallurgical Industry Planning and Research Institute, said to develop low-carbon generic technologies for the steel sector and explore decarbonization solutions is a positive move to cooperate and promote low-carbon technological innovation.
While China’s steel industry is facing challenges in energy conservation and consumption reduction, there is plenty of room for development in energy saving through management and technology, Li said.
Source: China Daily
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