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Earlier this year
Australian iron ore producers Rio Tinto teamed up with Australian steelmaker
BlueScope to develop “near-zero
emission-intensity” pathways for making steel from Pilbara iron ore.
Renewable electricity
and hydrogen would replace coking coal.
Iron ore miner Fortescue and
a company started by two former Fortescue
executives are developing plans to make low-emissions iron using competing
technologies.
But Australia, the
world’s biggest iron ore
exporter, won’t have the field to itself.
Africa, a continent
with boundless high-quality iron ore, is poised to become one of the world’s
biggest producers of low-emissions steel, rivalling China.
Africa is blessed with
sun, wind, iron ore of the necessary quality, and (importantly) a domestic
demand for steel set to grow ten-fold.
Green
steel is difficult
Global green steel
production emits 2.8 billion tonnes of carbon dioxide per year, about 8% of global energy
emissions, or 10% when emissions from the electricity used to make
steel are included.
While it is possible to
make steel in ways that don’t emit carbon, replacing thermal coal with
zero-emissions electricity, and coking coal with electricity and hydrogen, it
is expensive and may not be commercial until the 2030s.
Management consultant
McKinsey & Company believes green steel is unlikely to be cost-competitive
with traditional steel manufacture backed by carbon capture and storage until 2050.
One of the reasons
green steel would be expensive to make at scale is that it requires so-called
green hydrogen. Although hydrogen can be made from water and zero-emissions
electricity using electrolysis, at the moment less than 0.1% of
hydrogen is made that way.
Africa
has the energy and the right kind of iron
Africa, known as the “sun continent”
has on one measure the greatest potential for solar electricity production in
the world, nearly 40% of the global total. Importantly, the solar electricity
it is able to produce is stable,
varying little throughout the year.
Africa is also blessed
with enough wind to power its current electricity demands 250 times over.
It also has an impressive potential for hydroelectricity, 90% of which is
untapped, the largest unexploited
capacity in the world.
As well as the
potential sources of power needed to make green hydrogen and steel, Africa is
blessed with unusually large quantities of high-quality iron ore.
An iron content of 65%
is needed for the so-called “direct reduction”
process that removes the need for coking coal, and Africa has the world’s
largest undeveloped iron ore deposit of that quality – 2.4 billion tonnes – at
the Simandou mine operated
by Rio Tinto and Singapore’s Winning Consortium in southern Guinea.
China is helping fund a 600-kilometre railway to
get it to the coast.
Longer term, it will make more sense to turn this iron ore into
green iron and steel within Africa where energy is abundant instead of
exporting it 20,000 kilometres
to China for processing.
The carbon miles saved
will themselves reduce emissions.
Africa
will become a large market
And Africa itself is
likely to become the fastest-growing market for steel.
The steel use per
person in Africa in 2023 was only 24 kilograms,
which is only about one-tenth of the world average of 219 kilograms.
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