Anglo American has partnered with the Swedish company H2 Green Steel to produce the alloy using green hydrogen technologies as the mining titan steps up its drive to be carbon neutral by 2040.
The memorandum of understanding between the two parties includes studying and trialling the use of iron ore from Anglo’s subsidiary Kumba Iron Ore and its its Minas-Rio mine in Brazil as feedstock in H2 Green Steel’s Boden plant, which uses low-carbon production techniques.
The plant is set to reduce carbon emissions by up to 95% compared to traditional steelmaking, Anglo said in a statement on Tuesday.
Sweden and Europe are steadfastly transitioning towards a greener economy, with EU now requiring all new cars sold after 2035 to have zero carbon emissions.
H2 Green Steel was founded in 2021 with the ambition to accelerate the decarbonisation of the steel industry, using green hydrogen.
“Collaboration with industry leaders who share a vision for decarbonised steelmaking is central to our commitment to reduce emissions in our value chains,” said Peter Whitcutt, CEO of Anglo’s marketing business.
Anglo, which was founded in SA more than a century ago, has signed agreements with several other major steelmakers in Europe and Asia to research efficient feed materials suited for use in the so-called direct reduced iron (DRI) steelmaking, including iron ore pellets and lump iron ore.
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 carbon free.
“We are impressed by Anglo’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,” said Luisa Orre, chief procurement officer at H2 Green Steel.
In 2021, Anglo set out the goal to reduce its scope 3 emissions by 50% by 2040, building on a pre-existing commitment to reach operational carbon neutrality by the same year.
Controlling climate change has become a global imperative as a way to mitigate the frequency and severity of natural disasters.
Anglo shares were up nearly 1% to R597 in early afternoon trade on the JSE, giving it a market valuation of 793bn. Kumba shares jumped almost 7% to R479.52, the most since November, according to the Infront data.
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