IRON ORE
EMBRACING THE GREEN STEEL PHENOMENON Steelmakers are becoming more discerning on their path towards a net-zero future, and low grade or less sustainable iron ore producers risk being left out in the cold.
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here is an awkward conundrum facing today’s tenaciously growth-minded world – how do you balance a desire for expansion with the necessity to reduce one’s footprint? The iron ore industry faces this concern, with record production levels marred by ballooning emissions and the reality that investors, regulators, customers and employees are siding with the green transition. While the global production of iron ore decreased by three per cent to 2.2 billion tonnes in 2020, led by reduced outputs in Brazil and India, the industry is expected to bounce back. According to Fitch Solutions, worldwide iron ore output is set to average 2.4 per cent
from 2021 to 2025, with Australia’s iron ore production set to grow at an annual average of 1.7 per cent over the same timeframe. Given the role iron ore plays in steelmaking and broader industrialism, there’s going to be a continued need for this resource; the mining industry just needs to be smarter with how it is extracted. McKinsey & Company partner Christiaan Heyning believes iron ore miners need to be more fastidious with the quality of their product before putting it to market. “Demand for your products will differentiate depending on what you sell and to make it very simple – the purer the better and the higher Fe (iron) grade the better,” Heyning, speaking at the 2021 AusIMM Iron Ore Conference, says.
Heyning suggests this will lead to tougher decisions regarding lump and fine iron ore products, with the former being a more sustainable option as it doesn’t need to be sintered, but a more expensive commercial product at that. Then there’s direct-reduced (DR) pellets, an even more premium product, delivering an Fe grade of up to 67-68 per cent. “There’s going to be huge growth in DR (direct-reduced) pellets. You already see some companies already moving into that space and starting to produce pellets even if they don’t produce the steel themselves,” Heyning says. Brazilian major Vale is the world’s leading producer of iron ore pellets, producing 55.3 and 41.8 million tonnes (Mt) in 2018 and 2019 Pelletising is important to the green steel value chain.
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