The global steel supply chain is vast, with nearly 2 billion tonnes of steel products produced each year for use in our buildings, cars, white goods, wind turbines and many other steel-containing goods and infrastructure. As the steel industry works together to meet the challenge of climate change, the way forward is uncertain. There are multiple pathways to explore and many steps that can be taken to achieve a potential green end state, the stage of our steel decarbonisation framework where large-scale ‘near-zero emissions’ steel production can be achieved. Against this backdrop, it is critical to maintain supply chain resilience to ensure steel demand is met throughout the energy transition.
In the transition to a green end state, supply chain configurations need to achieve deep GHG emissions reductions in a cost-effective manner while maintaining reliability and flexibility.
Drawing on extensive research and expertise in steelmaking process technologies, the most promising potential pathways to a green end state were identified through four primary steelmaking process routes (Note: primary steelmaking is iron ore-based steel production, where the majority of greenhouse gas emissions occur, as opposed to scrap-based steel production, which produces fewer emissions but is limited by scrap supply). The four main steelmaking process routes identified are as follows:
Improved blast furnace carbon capture, utilization and storage (CCUS)
Electric furnace direct reduced iron
Electric Arc Furnace Direct Reduced Iron
Electrochemical reduction
Advancing industry development through these process routes will require extensive development of appropriate technologies, operational capabilities, and supporting infrastructure. Not all of these developments will be successful, and for those that are, local conditions will influence when, where, in what combination, and to what extent steelmakers adopt them. It is therefore wise to explore all four process routes simultaneously.
Path 1: Reducing blast furnace emissions is critical if the steel industry is to significantly reduce the greenhouse gas intensity of primary steel production by the 2030s.
The blast furnace route is efficient, reliable, scalable, and can process a wide range of iron ores. The blast furnace route is ubiquitous in today’s steel industry, accounting for ~70% of annual global crude steel production, or ~1.4 billion tonnes (China accounts for a higher share, ~90%, or ~900 million tonnes/year).
Emissions-reducing technologies that can be integrated or “plugged in” with the existing blast furnace route infrastructure offer a significant opportunity to accelerate emissions reductions in this century and into the next decade. They can leverage the large capital stock already invested in the industry and bypass the industry’s low turnover rate, as they are likely to be applied to the majority of primary steel production where durable blast furnace fleets will remain.
We believe that a significant reduction in the GHG emissions intensity of primary steel production by the 2030s (which is within the life of many steel assets) will require the development and widespread deployment of emission-reducing blast furnace retrofit technologies in parallel with technologies for other routes, which we believe may take longer to diffuse fully from today’s low share or zero capacity.
Contribute to the development of emission reductions for the blast furnace route by engaging with leading steelmakers on technologies. These technologies include top gas recovery, CCUS, hydrogen injection and replacing fossil carbon with biocarbon. Not all technologies will be commercially viable in all regions, but we believe that cost-effective emission reduction technologies will become increasingly available to steelmakers.
Raw material improvements have played an important role in driving these technologies. To this end, we have focused on advancing the evaluation of low ash coking coals, trialling improvements to our iron ore lump products and supporting customers in the use of WAIO products for pellet production.
Investing in emerging electrolytic technologies that, if successful, would enable a new process route (Route 4: electrochemical reduction by electrolysis), including molten oxide electrolysis by Boston Metal and low temperature iron by Electra. However, in the technically demanding area of steelmaking, an entirely new process route faces challenges in achieving commercial viability across multiple sites/regions. If achieved, these technologies will also need to demonstrate equivalent unit productivity and a path to integration with existing production lines to achieve mainstream deployment.
Process routes: Process routes using direct reduced iron (DRI) and electric arc furnaces (EAF) or electrosmelting furnaces (ESF) can replace retired blast furnaces or provide new capacity for primary steelmaking.
The EAF is currently the current electric furnace design for DRI consumption, but this design has a low barrier to entry. The ESF is an alternative furnace design that offers superior performance and feedstock flexibility compared to the EAF and we have conducted studies to determine if it is suitable for further development and are encouraging customers to consider the ESF.
Four main steelmaking process routes offer potential pathways to a green end state within our framework for steel decarbonization.
To explain why we prioritized ESF trials for scale-up in our development program, we revisited the key steps in converting iron ore into steel and then explained the different ways in which the DRI-EAF and DRI-ESF process routes achieve these steps.
Iron ore is made up of iron oxide and other impurities. To make it into steel, it goes through the following processes:
Reduction，The iron compounds in the ore react chemically with carbon and/or hydrogen at high temperatures and are converted into metallic iron.
Smelting，All the metallic iron and impurities are heated until they are completely melted. Impurities that resist reduction (primarily silica and alumina, called “gangue”) form a slag that floats on the molten iron. The two liquids can then be easily separated.
Refining，Excess reducing elements dissolved in the molten iron, such as carbon, phosphorus and sulphur, are removed to meet the required steel specifications.
These are not the only steps, but they are critical ones.
With the blast furnace process, both reduction and melting take place inside the blast furnace, while refining takes place in a separate basic oxygen furnace (BOF). With the ESF and EAF processes, the DRI units that feed these furnaces only perform the reduction and not the melting, so all impurities remain in the solid DRI and must subsequently be melted and refined to remove them.
Existing electric arc furnaces are designed for use with scrap steel raw materials.
Electric arc furnaces were originally designed and optimized to use the powerful heating power of an electric arc to melt large quantities of scrap metal quickly and within tight operating tolerances.
Electric arc furnaces are not suitable for reducing ore and therefore cannot produce iron from iron ore. The ore needs to be reduced (or “metallized”) first to an ore-based metal. Blast furnace metal and direct reduced iron are both ore-based metals that have become important electric arc furnace feedstocks for diluting harmful residual impurities such as copper and tin that cannot be separated from the scrap. As scrap supplies increase in the future, the demand for ore-based metals for diluting the scrap residues will also grow.
However, when electric arc furnaces use higher levels of direct reduced iron to replace the traditional blast furnace route for primary steel production, gangue impurities create more slag into which iron is easily lost. Losing iron in this process is expensive and inefficient, not only because additional ore is required to feed the furnace, but higher metal losses also mean higher hydrogen consumption rates and greater technical difficulty in reducing greenhouse gas emissions. 9 The electrical efficiency of the furnace and the quality of the steel produced are also very sensitive to the quality of the feed.
For these reasons, the iron ore used to produce EAF DRI is of the highest quality, typically with an iron content above 67%, gangue impurities below 2.5%, and low phosphorus content (the remaining mass is mostly oxygen atoms bound to the iron, which are the target of the reduction step). To limit iron losses in the EAF, DRI units are also configured to metallize as much of the iron ore as possible, and the DRI produced is typically blended with at least 50% scrap. Even with this high-quality feedstock combination, EAFs are not currently suitable for producing the highest quality steel (e.g., automotive sheet for car manufacturing). It is not a very flexible process, and raw material requirements limit wider application of the DRI-EAF production route.
Only about 3% of seaborne iron ore supplies meet the typical quality standards described above. The scarcity and high cost of this “DRI grade” iron ore restricts commercial DRI production to a few regions with suitable ore reserves and/or extremely cheap natural gas (or thermal coal), such as the Middle East, North Africa, the United States, India and Russia. DRI producers and EAF operators have been adapting to blending certain types of lower-grade material into their operations, but the DRI-EAF route remains sensitive to feed quality and is therefore only suitable for a small fraction of global iron ore and primary steel production.
Simply opening new mines that can meet typical DR grade specifications (after processing the ore) is not a viable option for transitioning the industry to a green end state. Suitable deposits are extremely scarce and difficult to develop for a number of reasons; often a combination of geopolitical instability, geological conditions, inadequate supporting logistics infrastructure and skilled labour, and myriad HSE risks.
Somewhat ironically, these deposits are often low in underground iron ore content, which has fundamental implications for mine development. The ore undergoes an intensive upgrading process (known as ‘beneficiation’) to reach DR grade product specifications. The beneficiation processes applied to these types of ore bodies can be very effective in separating iron from the gangue to produce DR grade products, but despite this, overall mass recoveries are inevitably low, i.e. the amount of material that must be mined, transported and processed per tonne of saleable ore product is large. Capital and operating costs increase accordingly, and operational complexity increases cost overruns, development delays, and the difficulty of achieving both production quantities and grades simultaneously.
These mines generate large amounts of tailings waste during the beneficiation process. Mine design to manage tailings can be challenging, depending on the characteristics of the tailings and the local environment (particularly the landscape and rainfall patterns). In some cases, approval to include tailings management in development plans cannot be obtained at all, hampering the development of mines. The application of beneficiation processes, such as grinding the ore into very fine particles for magnetic separation, also increases energy consumption, while the lower quality of the products recovered from the mined material often means higher greenhouse gas emissions from operations in the upstream mining stage.
While a small number of new mines producing DRI grade ores are likely to be developed, we expect the impact on the global ore mix available to the steel industry to be minimal due to scale constraints, with the possible exception of the Simandou Iron Ore Project in Guinea, if it is beneficiated (this project is not included in the published development plans).
The industry needs to develop pathways to produce near-zero-emission steel that can utilize a variety of iron ore sources in sufficient quantities to meet steel demand.
For deposits with high in-situ iron content, i.e., those that require minimal processing to be sold at sufficient grade (known as direct shipping ore, or DSO), intensive beneficiation methods can also be used to further improve the quality of the mined ore.
However, many of these deposits have weak magnetic properties and large density differences between the iron and impurities contained in the ore, making them less responsive to beneficiation, whose effectiveness depends on these characteristics. As the grade target of the concentrator is adjusted upward, iron is lost in the waste at a faster rate, reducing mine production and eroding the amount of iron recovered from the deposit.
For most mines, this creates a practical upper limit on the achievable product grade, which is below current DR standards even when the best available beneficiation technology is applied. In some cases, selective beneficiation of the most sensitive parts of the ore body can provide DR-quality product, but only for a small fraction of the mine’s production.
Electric smelting furnace: the key to flexible direct reduction of iron ore
Unlike electric arc furnaces, the ESF is designed specifically to process DRI and can be tailored to process different grades and physical forms of DRI, such as pellets, fines, lumps or briquettes.
This expands the range of applicable iron ore feedstocks to include medium-grade ores from our WAIO operations, which are naturally present in lumps and fines, but are also suitable for making into pellets and briquettes. Importantly, the metal produced by the ESF is also suitable for refining into a wide range of finished steel products produced by the blast furnace route. In the past, the competitiveness of existing blast furnace ironmaking made the commercialization of ESF technology unattractive, but the drive for near-zero emission primary steel production has changed its prospects.
So what is different about the ESF that allows it to have these wider capabilities? Like the EAF, the ESF involves generating heat in the iron mixture by passing an electric current between electrodes that are lowered through the furnace roof. However, the processes that occur inside are very different from those of the EAF. The ESF is configured for continuous operation, with reducing conditions maintained by adding small amounts of carbon 10 to the furnace, which is sealed to prevent the ingress of air.
The electrodes operate differently, which changes the electrical paths around the electrodes, the power density, and the associated metallurgical processes. DRI is continuously fed into the furnace to maintain a layer of progressively reduced and melted solid material that surrounds the electrodes and floats on the molten metal and slag. The furnace operating environment also allows for control of the slag chemistry in a manner similar to that of a BF slag rather than an EAF slag. The molten metal and slag are periodically discharged from the furnace through tap holes without stopping furnace operation.
These differences may sound subtle, but they hold the promise of opening up a new steelmaking process that is both flexible and cost-effective, thereby significantly reducing greenhouse gas emissions.
Typical operating ranges for BF and DRI process routes
Upstream and downstream collaboration
With successful scale-up, the DRI-ESF route will be suitable for gradually replacing the greenhouse gas emission-intensive front end of a steel mill – the blast furnace, sinter plant and coke ovens – without stranding its substantial downstream refining and processing assets and associated logistics infrastructure, which are necessary to manufacture and deliver large volumes of finished steel products to end users.
Alternatively, a stand-alone DRI or combined DRI-ESF plant could be built at a location where economics are more favorable (e.g., where green hydrogen is cheaper) without giving up downstream infrastructure advantages, since the DRI could be transported or the iron produced by the combined DRI-ESF plant could be cast and then transported to an existing steel mill (note that remelting the iron when it arrives at the steel mill requires additional energy, which can be avoided if the DRI-ESF is built on site at the steel mill).
The ability of the ESF to produce molten metal and slag similar to the BF also provides upstream synergies as the EAF relaxes the stringent thresholds for DRI quality.
Iron losses in the slag are lower and phosphorus in the ore can be managed by downstream refining processes. One of the most challenging technical hurdles in producing DRI is related to changes in the physical behavior of DRI (particularly stickiness) as it reaches its highest metallizations (above 90%).
By pairing a DRI unit with an ESF rather than an EAF, metallizations may only need to be 80-85%, thereby avoiding these issues altogether. This would reduce operational risk for existing shaft furnace DRI plant designs and open the door to other direct reduction technologies such as fluidized bed designs (traditionally challenged by the process complexity of achieving high metallizations), which can reduce fine ore (the most abundant form of iron ore on the market) without pre-processing it into sinter, lumps or pellets.
The metallization level of the DRI feed is therefore a key parameter to investigate when piloting and scaling up ESFs. On the other hand, validation of fluidised bed direct reduction technology for iron ore fines is not essential to the success of the DRI-ESF route for Pilbara-type ores, so various forms of DRI will be procured for the plant and tested.
The slag produced by ESF is expected to be similar to blast furnace slag and therefore suitable as a cement substitute without the need for disposal. By replacing greenhouse gas emission-intensive cement production, ESF has the potential to save 150-200 kg of CO2 per tonne of hot metal produced.
