According to a report from the Institute for Energy Economics and Financial Analysis (IEEFA), steelmakers must switch their production route from blast furnaces, which consume coal, to green hydrogen-based direct reduced iron (DRI) processes to reach net zero emissions by 2050. DRI technology requires a higher grade of iron ore than blast furnaces - at least 67 percent Fe content, though limited higher grade iron ore supply will make it difficult to realize the plans for a large global scale-up of DRI production, and, consequently, the decarbonization of the steel industry.
“Iron ore miners continue to be largely focused on producing lower quality blast furnace-grade iron ore as this coal-consuming technology still produces the great majority of the world’s steel,” the report said.
The deposits of high-grade iron ore are scarce, but mining options, such as magnetite mining, are available to alleviate the DR-grade iron ore supply issue. Magnetite iron ore is often more suitable and preferable for further processing and producing iron ore concentrate and pellets of DR-grade quality. The beneficiation of some existing iron ore production towards DR-grade is also possible.
Meanwhile, Germany-based Thyssenkrupp is planning to begin replacing blast furnaces with DRI plants from 2025 on, while ArcelorMittal and BlueScope are examining similar DRI-melting unit combinations that would allow the use of blast furnace-grade iron ore in direct reduction processes.