Vale (NYSE: VALE) expects to start building “mega hubs” to make low-carbon iron ore products for the steel industry in the next six months to a year, the Brazilian miner said on Thursday.
According to Ludmilla Nascimento, the company’s director of energy and decarbonization, areas in Brazil, the US and the Middle East are being analyzed for the operations.
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 MOUs (memorandums of understanding) signed with customers. So, we imagine that these projects will advance in the next six months to a year,” Nascimento 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.
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. Here, we will start with hydrogen. We have this possibility due to the country’s competitiveness in energy,” Nascimento said.
“The idea is to create these hubs to produce this low or almost zero-carbon product and export it as a density. We will export, in quotes, energy via product.”
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.
