The two companies have signed a multi-year supply agreement for direct reduction iron ore pellets (DR Pellets) from Rio Tinto’s Iron Ore Company of Canada (IOC) which will account for a significant part of the iron ore supply to H2 Green Steel’s flagship plant in Boden, Sweden. Additionally, the companies have signed an agreement whereby Rio Tinto will purchase and on-sell a part of the surplus low-carbon hot briquetted iron (HBI) produced by H2 Green Steel during the ramp-up of its steelmaking capacity.
DR Pellets are a critical material required for the production of high grade HBI which is in turn used to produce lower emission steel through electric arc furnaces. Steel making, a foundational material for infrastructure and net-zero energy transition, currently contributes around 8 percent of global carbon emissions.
“We are partnering across the steel ecosystem to find better ways to support the decarbonisation of iron and steel making, and to reduce our scope 3 emissions. Our supply of high-grade iron ore pellets will support the acceleration of H2 Green Steel’s project, and on-selling their low-carbon HBI will enable us to gain a deeper understanding of the future needs of our customers and end users in the emerging green iron and steel market”, said Simon Farry, Head of Rio Tinto Steel Decarbonization.
H2 Green Steel’s first-of-its-kind fully integrated, digitalized, and circular plant is expected to start operations in 2025. It will be the first large scale production of green steel globally. The site in Boden in northern Sweden, will hold one of the world’s largest electrolysis plants for green hydrogen production. The hydrogen will be used to reduce iron ore to green sponge iron. By using green hydrogen instead of coal, CO2 emissions from the process can be reduced by up to 95 percent.
“This is a significant milestone for our project in Boden. Not only by securing a supply of the high-quality iron ore needed for our green steel production, but also because we have a buyer for a portion of the HBI we initially expect to produce. Rio Tinto is a global leader in the mining industry and we welcome its concrete actions to accelerate the decarbonization of the steel industry,” says Henrik Henriksson, CEO at H2 Green Steel.