Vale and Port of Açu sign steelmaking decarbonisation Mega Hub agreement

(Posted on 26/09/23)

Vale has announced that it signed a MOU with the Port of Açu to study the development of a Mega Hub at the port located in São João da Barra in the state of Rio de Janeiro, to produce HBI (hot briquetted iron) using the direct reduction route.

Located in the northern region of Rio de Janeiro, the Port of Açu is the largest deep-water port-industry complex in Latin America.

The Mega Hub will initially receive pellets from Vale and could, in the future, include an iron ore briquette plant at site to supply the direct reduction route at the industrial complex. According to the agreement, both companies will seek to attract investors and clients to build and operate the Direct Reduction plant using natural gas which will be available at the port, with the possibility of eventually converting to green hydrogen, producing HBI with near-zero carbon emissions.

It is a pioneer initiative that considers a technical study coordinated by the Port of Açu and sectorial academics which proposes the use of HBI as partial burden in blast-furnaces, reducing greenhouse gas emissions and increasing steelmaking productivity without needing to substitute existing assets, such as the blast-furnaces and steelworks. Currently, HBI is mostly used in electric arc furnaces. Using HBI in this type of furnace will enable a smoother decarbonization process for the Brazilian steelmaking industry.

The agreement with the Port of Açu marks another step in the development of Mega Hubs in Brazil. Mega Hubs are industrial complexes designed to produce low-carbon steel products and Vale has already begun implanting such hubs in three countries in the Middle East (Saudi Arabia, UAE and Oman).

"We believe that Brazil has great potential to be a hub for low-carbon steelmaking. We have high-quality iron ore, abundant natural gas reserves and the potential to develop green hydrogen. As a Brazilian company, Vale seeks to partner with ventures that contribute in this direction. We want to be the driving force behind Brazil's 'neo-industrialization', which will be based on green industry," says Marcello Spinelli, executive vice-president of Iron Ore Solutions.

"The signing of this partnership demonstrates the full industrialization potential of the Port of Açu, confirming its vocation as the port of energy transition in Brazil. We believe that the Port of Açu, with its unique port infrastructure in the country, strategic location and potential for the most competitive Brazilian natural gas prices, brings together unique characteristics to, together with Vale, contribute to the decarbonization of the domestic and international steel industry," says José Firmo, CEO of the Port of Açu.

"Brazil is one of the most important iron ore and steel producers in the world and Vale is a leading player in this market. The use of HBI in blast furnaces can reduce greenhouse gas emissions by around 25%, with even greater potential reductions along the chain, which would put the industry in line with the goals of reducing emissions by 2030. With the Port of Açu as the gateway to zero-carbon industrialization projects, all the conditions and analyses point to the country becoming a major producer of HBI, supplying steel mills all over the world," said Albano Vieira, consultant for steel and mining issues at Prumo, the holding company that develops the Port of Açu.

In operation since 2014, the port is managed by Port of Açu Operations, a partnership between Prumo Logística, controlled by EIG, and the Port of Antwerp-Bruges International. A total of 20 companies have already been installed, including clients and partners, several of which are world-class companies. With the mining, petroleum and gas activities already established and in expansion, the port intends to accelerate industrialization with a focus on low-carbon projects, to be recognized as the energy transition port of Brazil.