Brazilian iron ore miner Vale will study the development of industrial complexes in Saudi Arabia, the UAE and Oman to produce low-carbon steel.
The miner has signed an agreement with local authorities and clients in the three countries to study the development of hot briquetted iron (HBI) and steel products to supply both the domestic and seaborne markets.
Vale will likely build and operate iron ore concentration and briquetting plants within the hubs, securing supply of high-grade agglomerated products, the miner said this week. Local parties are expected to promote the construction of the required logistics infrastructure. Investors and clients will likely construct and operate the direct reduction plants and be offtakers of HBI for either the export or domestic markets.
"We see a great potential in the direct reduction route, with the demand for these high-grade agglomerated products growing (by) 100mn t in the next 15-20 years," Marcello Spinelli, the company's executive vice president (iron ore), said.
The miner will structurally increase its supply of these products over the next few years.
HBI is a form of direct-reduction iron (DRI) that was developed to overcome the challenges with shipping and handling DRI. It is mainly used in electric arc furnace (EAF) plants but can also be used as a coolant in basic oxygen furnace steelmaking and in a blast furnace. The Middle East is an important DRI producer and user because of access to affordable electricity.
Vale operates two iron ore pellet plants in Oman with a nominal capacity of 9mn t. The operations accounted for 34pc of the miner's pellet output in the July-September quarter, producing 2.5mn t. The Oman plant is supplied by iron ore from the Brazil's Minas Gerais operations through the Tubarão port and from Carajás through the Ponta da Madeira maritime terminal. Both blast furnace-grade and direct reduction-grade pellets are produced at the miner's Oman plants.
The miner had signed an agreement with South Korean steelmaker Posco earlier this year to promote low-carbon HBI production.
