Vale's Partnership With DOE Signals Domestic Shift Toward Sustainable Steel Production

Brazilian mining giant Vale VALE has announced a deal with the Department of Energy (DOE) to develop a new iron ore briquette plant in the U.S.

The DOE has selected the project for potential financing of up to $282.9 million, underscoring a growing domestic commitment to innovative technologies aimed at reducing carbon emissions and strengthening the clean energy sector.

The Biden administration allocated substantial funds towards environmental programs, including over $2.9 billion for climate-related initiatives for the Environmental Protection Agency (EPA) and $10.6 billion for DOE climate and clean energy research.

Such investments pave the way for transformative technologies like the iron ore briquette, which has the potential to reduce emissions by up to 10% compared to traditional steelmaking processes.

Central to this endeavor is the development of iron ore briquettes—a product generated through the low-temperature agglomeration of high-quality iron ore.

These briquettes offer a sustainable alternative to traditional steelmaking processes that typically use sinters, pellets, and granules.

Not only do they cut greenhouse gas emissions, but they also emit fewer particulates and gases such as sulfur dioxide and nitrogen oxide.

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Vale’s foray into the realm of iron ore briquettes began with the inauguration of its first plant in Brazil in December.

“The interest shown by clients makes us confident that briquettes are here to revolutionize steel production,” said Vale's Executive VP, Marcello Spinelli, who explained the transitional process.

"The decarbonization of the steel industry will take place in stages. In the first, our clients are looking for ways to increase operational efficiency in the blast furnace route, reducing energy expenditure and, consequently, reducing CO2 emissions. At this stage, the briquette already makes a difference. And in the final stage, when green hydrogen will be available, the briquette will contribute to the production of zero-emission steel, which will be done through the direct reduction route, considered ‘cleaner’ than the blast furnace, ” he said.

With plans to ramp up production at its Tubarão plants, reaching a capacity of 6 million tons per year, the company is poised to meet growing demand for environmentally friendly steel production methods.

So far, the management has set a target to reduce scope 3 emissions by 15% by 2035. With decarbonization solution agreements signed with more than 50 clients, Vale is on the right path to becoming one of the main beneficiaries of the steel industry decarbonization.

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