IOC's direct reduction pellets will form a significant part of the iron ore supply for H2 Green Steel's flagship plant in Boden, Sweden, which will be one of the world's first large-scale low-carbon iron and steel producers.
The fully integrated, digitalised and circular plant is expected to be operational in 2025, converting direct reduction pellets into HBI and then producing steel through electric arc furnaces using green hydrogen. The Boden site will have one of the world's largest electrolysis plants for green hydrogen production.
Steel production, a key material for infrastructure and the net-zero energy transition, currently contributes around 8 per cent of global carbon emissions. By using green hydrogen in electric arc furnaces instead of coal in conventional steelmaking with blast furnaces, CO2 emissions can be reduced by up to 95%.
Mr Henrik Henriksson, Chief Executive Officer of H2 Green Steel, said: "This is an important milestone for our project in Boden. Not only do we secure the supply of high-quality iron ore required for our green steel production, but we also have a buyer for some of the HBI we initially expect to produce. Rio Tinto is a global leader in the mining industry and we welcome the concrete steps it is taking to accelerate the decarbonisation of the steel sector."
Simon Farry, Head of Steel Decarbonisation at Rio Tinto, said: "We are building partnerships across the steel ecosystem to support the decarbonisation of iron and steel production and find better ways to reduce our scope 3 emissions. Our supply of high quality iron ore pellets will support the acceleration of H2 Green Steel's project and selling their low carbon HBI will enable us to better understand the future needs of our customers and end users in the emerging green iron and steel market."