The Agreement covers multiple parts of Blastr’s integrated value chain, including supply of iron ore, offtake, products sale, logistics, and financial services, as well as a USD 10 million equity commitment by Cargill in Blastr’s planned Series A financing round.
The Agreement builds on the close relationship developed between Cargill and Blastr over the past year, centered on Blastr’s plan for an integrated green steel value chain which has the potential to deliver more than 90% reduction of Scope 1-3 C02 emissions per tonne of steel. It will enable a unique, profitable business model with a record low CO2 footprint for industrial-scale steel production and a platform for further growth. Blastr is initially developing a 6 million tons (Mt) DR- grade pellets plant and a 2.5 Mt direct reduced iron (DRI-EAF) steel plant with own green hydrogen production.
The Agreement covers the supply of iron ore to the Blastr Pellet Plant, offtake and selling of Direct Reduction (DR) pellets, Hot Briquetted Iron (HBI) and ultra-low CO2 steel products, scrap sourcing, green shipping and logistical solutions, and working capital and risk management services.
“Today’s Agreement demonstrates our shared ambition of realizing Blastr Green Steel vision to enable significant reductions of CO2 emissions along the steel value chain. We are very pleased to further strengthen our collaboration with Cargill and enter into a long-term strategic collaboration, with them also becoming a shareholder. Cargill’s access to raw materials and end-customers, combined with innovative trading, shipping, and offtake solutions, bring us a giant leap forward in realizing green steel production at scale”, says Blastr Green Steel CEO, Hans Fredrik Wittusen.
As part of the Agreement, Blastr and Cargill have signed a convertible loan agreement for USD 3 million, which brings the Cargill equity investment in Blastr ́s Series A financing, planned for the second half of 2023, to a total of USD 10 million. Cargill will further support Blastr in developing and commercializing ultra-low CO2 steel products for the European market, and the Parties will continue to apply their respective capabilities to accelerate the development of Blastr Green Steel.
Lee Kirk, Managing Director, Cargill Metals commented, “Cargill is pleased to be partnering with Blastr on the development of this transformational project. This Framework Agreement across the supply chain is a significant step forward to provide solutions to our customers and a demonstration of Cargill’s commitment to accelerate the development of new process routes that will enable the transition to a steel industry with lower C02 emissions and high ESG credentials. Cargill will be working with Blastr across the supply chain from raw materials to steel enabling the development of transparent certified supply chains and creating strategic flows to steel end customers in the growing green steel segment of the market. This brings us one step closer to our goal of shaping a responsible and sustainable ferrous supply chain that helps the world thrive.”
Over the next few months, Cargill and Blastr will finalize definitive agreements, covering the areas included in the strategic collaboration, while continuing to work closely together to realize the shared ambition of bringing ultra-low CO2 steel to global customers.
