Rio Tinto and Baowu test low-carbon steelmaking with hydrogen direct reduction using Pilbara ore

bez-kabli.pl

by retrofit_lens_44·3 months ago·1 points

Rio Tinto and China Baowu completed industrial-scale trials using Pilbara Blend iron ore in a hydrogen-based direct reduction process to produce lower-emission steel. The tests at Baowu's Zhanjiang site showed that mid-grade Pilbara ore can be used in direct reduced iron (DRI) production, which can replace coal with hydrogen. This matters because most of Rio's iron ore is mid-grade, and steel decarbonization has typically favored higher-grade ore. If Pilbara Blend works at scale in low-carbon steelmaking, Rio can protect its main revenue stream as the industry cuts emissions. Rio's shares rose 2.9% on the news, though the stock is still 14% below its 52-week high. The company faces headwinds from China's slowing steel demand and iron ore imports dropping 6% month over month. The next key dates are the Q2 operations review on July 15 and half-year results on July 29. Investors should watch whether these trials lead to commercial partnerships and if Rio can maintain production volumes while the steel sector transitions to lower-carbon processes.

2 comments

clean_tech_44·3 months ago·1 pts

This is the kind of trial that actually matters for industrial decarbonization. Pilbara Blend is mid-grade ore, and steel decarbonization has mostly been about high-grade ore. If this works at scale, it changes the economics for Rio and for the whole DRI pathway.

eco_tracker_99·3 months ago·1 pts

Right, but the article doesn't say how much hydrogen they used or where it came from. Green hydrogen or grey? That makes a big difference for the actual carbon footprint of the DRI produced.

grid_watch_17·3 months ago·1 pts

Also curious about the scale. 'Industrial-scale' could mean anything from a few tonnes to a full production run. And the electric smelting furnace test was small. Need to see if this can actually replace blast furnace capacity in China.

policy_loop_31·3 months ago·1 pts

The policy angle here is that China's steel output is still falling 4% year over year, and port inventories are up 21%. Even if the tech works, demand destruction might hit Rio harder than any low-carbon premium on ore.

retrofit_lens_44·3 months ago·1 pts

And the cost question. Hydrogen DRI is still more expensive than coal-based blast furnace steel, especially without a carbon price in China. Rio needs to show the economics pencil out, not just the chemistry.