Russian steelmaker and iron ore producer Metalloinvest has announced the construction of the world’s largest facility for hot briquetted iron (HBI), the raw material for low-carbon steelmaking in electric furnaces.
In an agreement signed in Vienna, the steel giant has contracted engineering company Primetals Technologies and process technology company Midrex Technologies to install their equipment in the $600 million plant, marking a major step towards decarbonising the world’s most polluting industry.
The new facility will be built in the town of Gubkin, 700 km south of Moscow. When it begins operations in 2025, it will be able to produce more than 2 million tonnes of HBI, which can be substituted for pig iron as a raw material in steel production. This method, carried out in electric arc furnaces rather than traditional blast furnaces, produces up to 50 percent less carbon dioxide, but it currently accounts for just 28 percent of global steel production.
Metalloinvest was already the world leader in production of HBI. This plan, in addition to another new facility announced earlier this year, will almost double the company’s HBI production capacity to nine million tonnes per year.
Perhaps more significantly, the new plant is built with a future switch to hydrogen in mind. HBI-based steel production has the potential to create zero carbon dioxide emissions, as demonstrated by Swedish steel manufacturer SSAB when it made the world’s first delivery of zero-carbon steel in August this year.
While this method is still not ready for mass production, Metalloinvest hopes that with the infrastructure provided by its new plant, it will be ready to switch to hydrogen-based steel production in the next 10 years.
Earlier this year Mikhailovsky HBI, which was jointly established by USM holding company and Mikhailovsky GOK (part of Metalloinvest), contracted Midrex and Primetals to build another HBI plant in Russia.
Nazim Efendiev, CEO of Metalloinvest, said: “Two new facilities will double joint production capacity of USM and Metalloinvest – from 4.6 to 9 million tonnes of HBI per year. This will strengthen our position as a leading provider of this crucial element in the transition to greener steel production. That is a significant milestone in the global steel industry’s decarbonisation efforts. We highly appreciate the expertise of our partners Primetals and Midrex, and we are looking forward to jointly implementing the project according to our tight deadlines”.
Etsuro Hirai, CEO of Primetals Technologies Austria, said: “HBI helps steel producers to reduce the carbon footprint of their products while increasing its competitiveness. Together with Alisher Usmanov’s companies, we are creating the basis for the development and steady movement forward of European green metallurgy”.
Metalloinvest’s announcement comes amid increasing demand for green steel, in step with a greater focus on sustainability among investors, governments and consumers. It is a particularly salient topic in the run-up to the COP26 climate conference in Glasgow this November, where governments will discuss ways to reduce emissions from heavy industry, among other topics.
Metalloinvest is slated to hold an IPO early next year, which industry professionals say could fetch it a valuation of up to $20 billion.