Rio Tinto Group (NYSE: RIO) revealed that it has signed an MOU with Paul Wurth S.A. and SHS-Stahl-Holding-Saar GmbH & Co. KGaA (SHS) to discover the creation of a low-carbon steel feedstock. This collaboration will allow the firms to delve into the feasibility of converting iron ore pellets into low-carbon hot briquetted iron (HBI). The firms are planning to do this by utilizing green hydrogen produced from hydro-electricity in Canada.
Furthermore, IOC in which Rio Tinto owned a majority stake will provide high-grade iron ores as well as the proficiencies in mining, administering, and pelletizing. Following the terms and conditions of the pact, SHS will provide its iron and steel making capabilities and Paul Wurth will offer proficiency in plant building and process knowledge in the area of extremely effective hydrogen generation and Midrex direct decrease plants.
In simple words, this collaboration will integrate the capabilities of a prominent global miner, popular steelmakers of Europe, and a global leader in the development and delivery of engineering solutions for unified steelmakers. Canada is an excellent location for this product because Rio Tinto is a highly recognized mining firm in the provinces of Canada.
Moreover, Canada also offers the opportunity to gain access to cost-competitive hydro-electricity, and closeness to crucial markets in Europe and North America. This project has great importance because it lessens carbon emissions by utilizing green hydrogen during the conversion of high-grade iron ore pellets into low-carbon.
The collaborated firms will also leverage the expertise of all the partners to carry out the feasibility analysis into the possibility of producing industrial-scale low-carbon iron in Canada. It has been disclosed that the feasibility analysis will be executed in late 2021.
IOC stated that this collaboration is proof of RIO's commitment to develop and implement low carbon technologies. Moreover, Paul Wurth and SHS commented that the firms have full confidence that by leveraging the expertise of all the partners they will be able to make the most suitable and effective solutions for this difficult shift towards a carbon-free industry. The utilization of green hydrogen is the crucial step in diminishing carbon emission.