The investors in H2 can sleep pretty easily. They can look forward to the EU turning its shadow carbon price into a real one in a year or two through carbon border taxes. Since Australia and the USA have already conceded the principle through their domestic shadow carbon prices, they will hardly be able to object at the WTO. If that fails, the Commission has already waved through a massive subsidy from the German government to ThyssenKrupp's green steelworks in the Ruhr, and the Swedish government will fight for equal treatment. In addition, HYBRIT has already sold early batches of green steel from its pilot plant to Volvo Cars and other customers willing to pay a premium for green bragging rights. There is a ready market awaiting.
A minor but intriguing factor is steel quality. Before the Industrial Revolution, iron had been smelted for 1500 years with charcoal, virtually pure biomass carbon. The ironmasters in England ran out of forests to burn and were forced to switch to coal, abundant but awash in contaminants. Quality went down. DRI ironmaking goes back to the future. Sweden has a nice little niche in top-quality steel for surgical instruments, implants, machine tools etc., and DRI will help keep it.
Sweden has a smallish iron ore mine up near Kiruna, and will source its green iron locally. That does not hold for ThyssenKrupp, which will continue to import ore via ship to Rotterdam and barges up the Rhine. Why? If you make the DRI iron pellets near the mine, in Brazil or Australia, you can reduce the shipping weight and volume by 40% - count the molecular weights of FE2 and Fe2.O6. Australia and Brazil have much cheaper renewable electricity than Germany. Building an automated DRI plant in Duisbutg is very expensive protectionism, to save a handful of Real Men jobs. There is no security gain, as the ore is imported anyway. BTW, there is little point in offshoring the second stage, making steel in electric furnaces. The variety of products, and the greater local supply of bulky old scrap steel to be mixed with the virgin iron pellets, make a strong case for keeping this stage close to the customers. Most of the Real Men are safe.
Sources? An article in The Conversation (https://are huge .com/australias-main-iron-ore-exports-may-not-work-with-green-steelmaking-heres-what-we-must-do-to-prepare-201469) highlights problems with ore for DRI, but does not suggest they are insoluble. One way or another, the crud that comes with iron ore has to removed to make steel, and is removed now in blast furnaces using existing Australian and Brazilian ores. Mining and steel companies are huge and can easily find the money to fix an existential threat.
Lots of things would be cheaper once CO2 emissions are priced properly. How do we get the politicians to do that. Heck, how do we get the "environmentalists" toeven ASK the politicians to do that?
Fortescue are betting the farm on magnetite ore against cheaper haematite. It’s an informed judgement, but I suspect that non-expert pundits and journalists have been accepting Fortescue’s spin defending it rather uncritically.
It’s true that haematite is much less magnetic than magnetite, making magnetic separation to clean up the ore infeasible for the former. However, there are other methods available: “gravity separation techniques such as dense medium separation, jigging, upflow classification/hindered bed settling, and spiraling”. https://www.sciencedirect.com/science/article/abs/pii/B9781782421566000101
I don’t have a horse in this race. There is plenty of both types of ore to go round. We can sit back and enjoy the remarkable speed at which the steel transition is going. Hybrit’s small pilot hydrogen DRI plant started production in August 2021. The new investment in ore and green steel is in plants of a million tonnes a year or more. They have jumped the bids to slam.
The investors in H2 can sleep pretty easily. They can look forward to the EU turning its shadow carbon price into a real one in a year or two through carbon border taxes. Since Australia and the USA have already conceded the principle through their domestic shadow carbon prices, they will hardly be able to object at the WTO. If that fails, the Commission has already waved through a massive subsidy from the German government to ThyssenKrupp's green steelworks in the Ruhr, and the Swedish government will fight for equal treatment. In addition, HYBRIT has already sold early batches of green steel from its pilot plant to Volvo Cars and other customers willing to pay a premium for green bragging rights. There is a ready market awaiting.
A minor but intriguing factor is steel quality. Before the Industrial Revolution, iron had been smelted for 1500 years with charcoal, virtually pure biomass carbon. The ironmasters in England ran out of forests to burn and were forced to switch to coal, abundant but awash in contaminants. Quality went down. DRI ironmaking goes back to the future. Sweden has a nice little niche in top-quality steel for surgical instruments, implants, machine tools etc., and DRI will help keep it.
Sweden has a smallish iron ore mine up near Kiruna, and will source its green iron locally. That does not hold for ThyssenKrupp, which will continue to import ore via ship to Rotterdam and barges up the Rhine. Why? If you make the DRI iron pellets near the mine, in Brazil or Australia, you can reduce the shipping weight and volume by 40% - count the molecular weights of FE2 and Fe2.O6. Australia and Brazil have much cheaper renewable electricity than Germany. Building an automated DRI plant in Duisbutg is very expensive protectionism, to save a handful of Real Men jobs. There is no security gain, as the ore is imported anyway. BTW, there is little point in offshoring the second stage, making steel in electric furnaces. The variety of products, and the greater local supply of bulky old scrap steel to be mixed with the virgin iron pellets, make a strong case for keeping this stage close to the customers. Most of the Real Men are safe.
Aussie iron ore is not high enough quality for DRI (especially Fortescue), needs lots of processing to get it there, it's too costly
Sources? An article in The Conversation (https://are huge .com/australias-main-iron-ore-exports-may-not-work-with-green-steelmaking-heres-what-we-must-do-to-prepare-201469) highlights problems with ore for DRI, but does not suggest they are insoluble. One way or another, the crud that comes with iron ore has to removed to make steel, and is removed now in blast furnaces using existing Australian and Brazilian ores. Mining and steel companies are huge and can easily find the money to fix an existential threat.
https://theconversation.com/australias-main-iron-ore-exports-may-not-work-with-green-steelmaking-heres-what-we-must-do-to-prepare-201469.
Also this https://ieefa.org/resources/unlocking-potential-magnetite-ore-australias-iron-and-steel-transition
Sorry, haematite is Fe2.O3.
Lots of things would be cheaper once CO2 emissions are priced properly. How do we get the politicians to do that. Heck, how do we get the "environmentalists" toeven ASK the politicians to do that?
Stealth technocracy is working, as the growing reach of shadow prices shows. Just too slowly.
Fortescue are betting the farm on magnetite ore against cheaper haematite. It’s an informed judgement, but I suspect that non-expert pundits and journalists have been accepting Fortescue’s spin defending it rather uncritically.
It’s true that haematite is much less magnetic than magnetite, making magnetic separation to clean up the ore infeasible for the former. However, there are other methods available: “gravity separation techniques such as dense medium separation, jigging, upflow classification/hindered bed settling, and spiraling”. https://www.sciencedirect.com/science/article/abs/pii/B9781782421566000101
If you wanted to make a case for haematite:
• Both RTZ at Pilbara (https://www.riotinto.com/-/media/Content/Documents/Operations/Pilbara/RT-Pilbara-Mining-process-diagram.pdf) and Vale in Brazil (https://vale.com/w/vale-to-invest-11-billion-reais-in-dry-iron-ore-processing-over-the-next-five-years) operate large beneficiation plants for haematite ore.
• ThyssenKrupp, building a 1.2 mt/yr green DRI steel plant in Duisburg to replace blast furnaces, currently gets its iron ore from Vale, presumably haematite (https://www.thyssenkrupp.com/en/newsroom/press-releases/thyssenkrupp-stahl-disposes-of-brazilian-iron-ore-interests-as-part-of-continuing-portfolio-optimization-at-thyssenkrupp--3346.html ). I haven’t seen any report that they are planning on changing supplier.
• The existing Indian DRI plants – using fossil fuels not hydrogen – are entirely dependent on haematite, since magnetite reserves are of low quality. (https://abmproceedings.com.br/en/article/download-pdf/challenges-of-indian-iron-ore-industry-geology-mining-and-processing-perspective ).
I don’t have a horse in this race. There is plenty of both types of ore to go round. We can sit back and enjoy the remarkable speed at which the steel transition is going. Hybrit’s small pilot hydrogen DRI plant started production in August 2021. The new investment in ore and green steel is in plants of a million tonnes a year or more. They have jumped the bids to slam.