Vale signed a memorandum of understanding (MOU) with the Port of Açu to study the development of a Mega Hub at the port to produce hot briquetted iron (HBI) using the direct reduction method. Located in the northern region of Rio de Janeiro, the Port of Açu is the largest deep-water port in Latin America.

The Mega Hub will initially receive pellets from Vale and could, in the future, include an iron ore briquette plant at site to supply the direct reduction method at the industrial complex. According to the agreement, both companies will seek to attract investors and clients to build and operate the direct reduction plant using natural gas, which will be available at the port, and possibly converting to green hydrogen to produce HBI with near-zero carbon emissions.

“We believe that Brazil has great potential to be a hub for low-carbon steelmaking,” said Marcello Spinelli, executive vice-president of Vale’s Iron Ore Solutions. “We have high-quality iron ore, abundant natural gas reserves and the potential to develop green hydrogen. We want to be the driving force behind Brazil’s ‘neo-industrialization.’”

It is a pioneer initiative, according to Vale, that considers a technical study coordinated by the Port of Açu and sectorial academics which proposes the use of HBI as partial burden in blast-furnaces, reducing greenhouse gas emissions and increasing steelmaking productivity without needing to substitute existing assets, such as the blast-furnaces and steelworks. Currently, HBI is mostly used in electric arc furnaces. The use of HBI in blast furnaces, according to Vale, will enable a smoother decarbonization process for the Brazilian steelmaking industry.

“The signing of this partnership demonstrates the full industrialization potential of the Port of Açu,” said José Firmo, CEO of the Port of Açu. “With its unique infrastructure, strategic location and potential for the most competitive Brazilian natural gas prices, Port of Açu brings together unique characteristics to, together with Vale, contribute to the decarbonization of the domestic and international steel industry,”

The agreement with the Port of Açu marks another step in the development of Mega Hubs in Brazil. Mega Hubs are industrial complexes designed to produce low-carbon steel products and Vale has already begun implementing such hubs in three countries in the Middle East (Saudi Arabia, UAE and Oman).