ArcelorMittal: Green Steel for Europe, Blast Furnaces for India...

ArcelorMittal: Green Steel for Europe, Blast Furnaces for India | IEEFA



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ArcelorMittal’s plans for more coal-based steelmaking in India contrasts markedly with its developments in Europe and Canada, where the company is planning a transition away from blast furnaces to direct reduced iron (DRI)-based steelmaking using green hydrogen under its ‘Innovative DRI’ decarbonisation pathway. In October 2022, ArcelorMittal broke ground on its US$1.3 billion transition to DRI-based steelmaking in Ontario, Canada, and it has similar plans in Spain, France, Belgium and Germany.

Concerns are also rising about the future availability and cost of coking coal due to a lack of investment in new mining capacity. In November 2022, the CEO of BHP — the world’s largest shipper of coking coal — stated that the company has no “growth capital” allocated to coking coal. South32 also made clear in 2022 that it will not be investing in any new coking coal projects and will wind down its coal business as existing mines are depleted.Steelmakers are coming under increasing pressure to decarbonise their operations. This pressure will only escalate if they start to increase their own investment in coking coal mines as incumbent miners and financiers exit the sector.

A 2021 report by think tank E3G and the U.S. Department of Energy’s Pacific Northwest National Laboratory found that any blast furnaces without CCUS will need to be phased out by 2045 for the global steel sector to be on an orderly 1.5°C pathway and no more new blast furnaces without CCUS should come online after 2025 to avoid stranded assets. AM/NS India’s expansion plan will see two new blast furnaces — without CCUS — brought online in 2025 and 2026 with the likelihood that further blast furnaces are being planned for the greenfield sites in Odisha.

The cost of green hydrogen could fall to approximately $1.60/kg by 2030 and $0.70/kg by 2050 according to NITI Aayog and RMI, which could see hydrogen and DRI-based steel production becoming cost competitive with natural gas-based DRI by 2027. By 2030, they see green hydrogen-based DRI being the most cost-competitive steelmaking route in India, cheaper than blast furnace-based operations."

A good read. More affordable renewable energy market, pressure to decarbonise, big companies not investing in coal mines > pushing coal prices higher, cost of green hydrogen to fall carbon capture technology has a long history of failure, green hydrogren will get cheaper/available = DRI all day everyday. It is all coming together. AncelorMittal will have need DR grade (blast furnace) magnetite pellets in India is all I can see/read from these articles to combat decarbonisation questions from their shareholders.

Good times for MGT.