Iron ore’s uncomfortable truth

Iron ore

Australia’s iron ore miners have an opportunity to embrace green steel.

Australia’s carbon-intensive iron ore industry will face awkward questions as the world’s net-zero pursuit strengthens, and the need to evolve has never been more pertinent.

Hampered by decreased prices and inconsistent demand, Australia’s iron ore industry has experienced a difficult end to 2021.

Numerous iron ore mining companies were forced to halt operations as a result of the crunch, including Venture Minerals’ Riley mine in Tasmania, Mount Gibson Iron’s Shine project in Western Australia (WA), while Indus Mining had to put its WA Ridges project into care and maintenance.

This came as China, Australia’s biggest iron ore customer, began reaching its steelmaking thresholds earlier than expected, while its growth-minded economy slowed in the wake of a boom early in 2021.

The environment had a big part to play as well, with the need to reduce air pollution a priority ahead of the Winter Olympics in February.

Despite the momentary drop in demand, given iron ore’s role in the world’s industrial movement, there’s going to be a continued need for this resource. According to Fitch Solutions, worldwide iron ore mine output is set to average 2.4 per cent growth from 2021 to 2025, with Australia’s iron ore production set to increase at an annual average of 1.7 per cent over the same timeframe.

Production may increase, but steelmakers will become more discerning as net-zero targets loom large, and low-grade or less sustainable iron ore producers risk being left out in the cold if they don’t make alterations.

This is where the concept of ‘green steel’ comes into the picture: a phenomenon that replaces fossil fuels with renewable energy in the steelmaking supply chain.

The green steel process also necessitates the use of high-grade iron ore, something which miners can achieve through practices such as beneficiation.

Global mining technology developer Metso Outotec is playing, and will continue to play, a critical role in the green steel movement.

The company’s involvement in sustainable steelmaking dates back to the 1980s when its predecessor Lurgi Metallurgie developed the Circored process.

Circored uses hydrogen instead of fossil fuels in the reduction of iron ore fines to make direct-reduced iron (DRI) or hot briquetted iron (HBI). This can then be used as feed material in electric arc furnaces for carbon-free steelmaking.

Circored had only been semi-commercialised to this point, but Metso Outotec launched the next generation of the Circored process in December.

Metso Outotec Asia Pacific president Stuart Sneyd believes this method has an important role to play moving forward.

“Circored is already ready and configured for hydrogen reduction, whether it be grey, blue or green hydrogen – it’s ready to go in that sense,” Sneyd, speaking at the 2021 AusIMM Iron Ore Conference, says.

“It can produce a zero-carbon product in the end and we argue that the technical feasibility (of Circored) is proven at an industrial-scale (through a demo plant in Trinidad).”

The pilot plant commenced operations in 1999 and produced more than 300,000 tonnes of high-quality HBI across several months. 

Circored is the only 100 per cent hydrogen-based iron ore reduction process capable at such a scale and Metso Outotec aims to announce further additions to its capabilities during the first quarter of 2022.

Iron ore
Pelletising is important to the green steel value chain.

The company is also at the forefront of sustainable pelletising. 

Proven at producing high-quality pellets at low costs, Metso Outotec’s pellet plants are in use at iron ore operations across the world.

According to Sneyd, pellet plants will be an important fixture in an advancing green-steel world and Metso Outotec continues to explore opportunities in this regard.

“Pellet plants are likely to play a prominent role in the future and what can be done to support a carbon-neutral future as far as this particular technology is concerned?” Sneyd says.

“Things that we consider are alternative burner fuels such as biofuel and hydrogen in pellet plant powering, process modifications for energy efficiency and new hoods for electrification – all of these things are under development are being considered.”

Metso Outotec has added a digital solution to its iron ore pelletising process with the aim to improve production capacity and quality, while reducing energy and costs.

The company has iron ore pellet plants in Brazil, China and Africa but not Australia, according to public contracts.

Hydrogen is a hot topic in the mining industry as the green push strengthens, yet there are still unanswered questions that encircle the resource. 

At this point in time, hydrogen is expensive to produce, difficult to transport and store, and highly flammable and dangerous.

Deeming the obstacles as opportunities not impossibilities, there are already initiatives in play which are aiming to further unlock the resource.

In November, the Western Australian Government awarded a contract to GHD Group to investigate the role the state’s iron ore can play in the global green steel movement, unpacking hydrogen capabilities as part of that.

In partnership with ACIL Allen, GHD Group will initially identify opportunities and current barriers for WA to support this revolution.

The next step will be to examine infrastructure needs, market dynamics and policies to solidify the state’s understanding of the green steel value chain.

Minerals Research Institute of Western Australia (MRIWA) chief executive officer Nicole Roocke says the state’s examinations would be centred around its Pilbara and Mid West regions.

“(By analysing future market dynamics) we’ll be looking at what the demand for low-grade and high- grade ores are going to be into the future, and look at the jurisdictional and mineral endowment differences,” Roocke, speaking at the AusIMM conference, explains.

“Also, to understand that if hydrogen is to be part of the solution, where does it have a role to play and what do production costs need to be to be able to make it economic.”

Roocke says the examinations will establish the clarity Western Australia needs to explore a green steel opportunity intelligently and efficiently.

“The whole intention of doing this work is to be able to ensure that both from a Western Australian Government and industry perspective, we have an understanding of what the opportunity is, and we have a better understanding of what the risk is to the state,” she says.

Having brushed off the toils of 2021’s closing months, Australia’s iron ore industry can expect more trying enquiries from sustainably-minded steelmakers in 2022.

Nevertheless, with the green steel movement in play, iron ore has the opportunity to evolve and prove the viability of a new direction – one that seems to be inevitable in a low-emissions future.  

This article also appears in the February issue of Australian Mining.

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