Brazilian mining company Vale has signed a memorandum of understanding (MOU) with the operator of the Port of Açu to study the construction of a low-carbon steelmaking complex.

The Port of Açu is managed by the Port of Açu Operations, a partnership between Prumo Logistica, controlled by EIG, and the Port of Antwerp-Bruges International.

The proposed facility, dubbed Mega Hub, will be developed at the port of Açu in São João da Barra, the Rio de Janeiro state, and produce hot briquetted iron (HBI) using the direct reduction route.

The Mega Hub will initially receive pellets from Vale and could include an iron ore briquette plant at the site in future, to supply the direct reduction route at the industrial complex.

Under the terms of the agreement, both Vale and Port of Açu will attract investors and clients to build and operate the natural gas-fired Direct Reduction plant at the port.

The plant will be later converted to run entirely on green hydrogen in future, to produce the HBI with near-zero carbon emissions.

Vale iron ore solutions vice-president Marcello Spinelli said: “We believe that Brazil has a lot of potential to be a low-carbon steelmaking hub. We have high-quality iron ore, abundant natural gas reserves and the potential to develop green hydrogen. As a Brazilian company, Vale is seeking to partner with other entities that can add value to this process.”

Vale, in partnership with the Port of Açu and relevant academics, will conduct a technical study of the proposed partial use of HBI in blast furnaces.

The approach will reduce greenhouse gas emissions and increase steelmaking productivity without needing to modify the existing assets, such as the blast furnaces and steelworks.

Currently, HBI is mostly used with electric arc furnaces, which enables a smooth decarbonization process for the Brazilian steelmaking industry, said Vale.

Furthermore, the Brazilian mining company has already started building low-carbon steelmaking Mega Hubs in three countries in the Middle East, Saudi Arabia, the UAE and Oman.