By Clement Choo and Hector Forster
July 9, 2021 - Miner Rio Tinto said July 8 it will pursue low-carbon steelmaking together with South Korea's POSCO, building on technical cooperation with China Baowu Steel Group and Nippon Steel Corp.
Rio Tinto and BHP have earlier signed accords with steel groups in Japan and China around optimizing use of iron ore and coking coal, met coke, to help customers lower product emissions and improve Scope 3 benchmarking.
"Rio Tinto and POSCO have signed a memorandum of understanding to jointly explore, develop and demonstrate technologies to transition to a low-carbon emission steel value chain," the mining company said in a statement. "The partnership will explore a range of technologies for decarbonisation across the entire steel value chain from iron ore mining to steelmaking, including integrating Rio Tinto's iron ore processing technology and POSCO's steelmaking technology."
POSCO is focused on sustainable development, and South Korea's biggest steelmaker can play an important role in finding a way to build a low-carbon steel industry through the MOU with Rio Tinto, POSCO's head of steel business unit, Hag-Dong Kim, said in the statement.
Iron ore miners Rio Tinto, BHP Group and Fortescue Metals Group are pursing lower emissions from operations and shipping, and exploring development of hydrogen-based iron making, which may be optimized through iron ore processing. The production of low-carbon or carbon-neutral steel may expand by using green hydrogen generated from renewable energy sources rather than fossil fuels, either as an alternative to pulverized coal injection, or PCI coal, or as an alternative reductant fuel to met coke and natural gas.
The agreement with POSCO complements Rio Tinto's partnerships with other customers as the steel industry focuses on developing technologies for the transition to a low-carbon economy, Rio Tinto's vice president of iron ore sales and marketing, Simon Farry, said in the statement.
Steel Decarbonization, Investments
Rio Tinto plans to work on steel decarbonization pathways through partnerships with customers, and the company has established a $1 billion fund to invest in climate-related projects.
The miner is investing in technologies potentially able to deliver reductions in steelmaking carbon intensity of at least 30% from 2030, or with a potential to deliver carbon neutral steelmaking pathways by 2050, and zero-carbon aluminum.
Rio Tinto and POSCO both target reaching net zero carbon emissions by 2050, with Rio Tinto's net zero target including emissions from shipping products.
"POSCO's efforts to decarbonise will play an important role in achieving the country's recently announced ambition to become carbon-neutral by 2050, which has inspired Korean companies to accelerate decarbonisation activities," Rio Tinto said.
POSCO said it plans to use innovative technologies such as Carbon Capture, Utilization and Storage (CCUS), and hydrogen-based steelmaking to become a competitive low-carbon steel producer.
POSCO's plans to use green hydrogen to replace coal, estimate the need for 3.7 million mt/year of the gas. Also, it plans to become a major producer and supplier of hydrogen, making 5 million mt of green hydrogen by 2050. To achieve its targets, the steelmaker said March 2 it will invest Won 10 billion ($8.7 million) to harness hydrogen for steelmaking.
Rio Tinto produced 333.4 million mt of iron ore in 2020 while POSCO has about 45.3 million mt/year of crude steel and stainless steel production capacity.
Miner Vale is pursuing low-carbon ironmaking, partnering with Japan's Kobe Steel and Mitsui & Co. since July 2020 through a 'heads of agreement' to establish a new venture for the global supply of low-emissions metallics and steel making solutions. Kobe Steel owns Midrex, which supplies direct reduction iron technology. Vale has developed Tecnored, a low-carbon pig iron process using biomass, syn-gas and hydrogen, which emits less carbon emissions than met coke.
Vale, which is a major producer of iron ore and nickel, aims to reduce by 15% its Scope 3 emissions by 2035, from 2018 levels, working to cut emissions in steel production and its value chain. Vale said 98% of its emissions are Scope 3, with a limited contribution from its global mining operations to overall emissions.