Anglo American plc (LON:AAL) has signed a memorandum of understanding with H2 Green Steel, the Swedish hydrogen and steel producer, to work together on the advancement of low carbon steelmaking processes.
The agreement includes studying and trialling the use of premium quality iron ore products from Anglo American’s Kumba mines in South Africa and Minas-Rio mine in Brazil as feedstock for H2 Green Steel’s direct reduced iron (DRI) production process at its Boden plant in Sweden.
Peter Whitcutt, CEO of AAL’s Marketing business, said: “Collaboration with industry leaders who share a vision for decarbonised steelmaking is central to our commitment to reduce emissions in our value chains.
“Our work with H2 Green Steel will focus on exploring ways for premium, responsibly produced iron ore from our operations to be used as feedstock in the Boden plant’s low carbon production process, paving the way to a cleaner, greener way to produce steel – one of the backbone materials for the roll-out of energy transition infrastructure and for ongoing global socio-economic development. ”
Luisa Orre, Chief Procurement Officer, H2 Green Steel, said: “Our purpose is to decarbonise hard to abate sectors, and this is only possible with strong partnerships along the value chain with a true commitment to reducing scope 1, 2 and 3 emissions. We are impressed by Anglo American’s efforts to bring high-quality iron ore products to customers which focus on low carbon iron and steelmaking, and we look forward to continue working with them, not only for our first green hydrogen integrated steel plant in Sweden but for other future locations globally”.
H2 Green Steel was launched in 2021 to accelerate the decarbonisation of the steel industry by using green hydrogen. The company is developing a fully integrated, digitalised, and circular DRI plant in Boden, northern Sweden, which will produce green steel, reducing CO₂ emissions by up to 95% compared to traditional steelmaking. The founder and largest shareholder of H2 Green Steel is investment company Vargas.
Anglo American’s ambition for 50% Scope 3 emissions reduction by 2040
Climate science has set an imperative to decarbonise the global economy as quickly as possible.
Building on the series of environmental and other commitments set out in its 2018 Sustainable Mining Plan, Anglo American set out an ambition in 2021 to reduce its Scope 3 emissions by 50% by 2040, building on a pre-existing commitment to reach operational (i.e., Scope 1 and 2) carbon neutrality by the same year. With the majority of AAL’s Scope 3 emissions linked to materials – steelmaking coal and iron ore – sold into the steelmaking industry, the steel value chain is central to our decarbonisation efforts.
The Company’s approach includes joining forces with like-minded customers and others with similar ambitions for a lower carbon future. For example, Anglo American has signed agreements with a number of major steelmakers in Europe and Asia to research efficient feed materials suited for use in direct reduced iron (DRI) steelmaking, including iron ore pellets and lump iron ore.
Steel production by DRI is a technically proven production method estimated to be significantly less carbon intensive than the traditional blast furnace and basic oxygen furnace integrated steelmaking process. When using green hydrogen as a reducing agent, the process can be made largely CO2-free.
