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Brazil's Vale and Port of Açu join forces to create Mega Hub for low-carbon steel production

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(Kitco News) - Brazilian mining and metals group Vale (NYSE: VALE) announced Tuesday that the company and the Port of Açu signed an agreement to develop a Mega Hub for the decarbonization of steelmaking, which will focus on using the direct reduction route to produce HBI (hot briquetted iron).

The company said 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 route 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, with the possibility of eventually converting to green hydrogen, producing HBI with near-zero carbon emissions.

“It is a pioneer initiative 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,” Vale said.

The company noted that currently, HBI is mostly used in electric arc furnaces, adding that using HBI in this type of furnace will enable a smoother decarbonization process for the Brazilian steelmaking industry.

"We believe that Brazil has a lot of potential to be a low-carbon steel making hub. We have high-quality iron ore, abundant natural gas reserves and the potential to develop green hydrogen. As a Brazilian company, Vale is seeking to partner with other entities that can add value to this process,” it said.

Mega Hubs are industrial complexes designed to produce low-carbon steel products and Vale has already begun implanting such hubs in three countries in the Middle East (Saudi Arabia, UAE and Oman).

Vale is the largest producer of iron ore, pellets and nickel. The company also has operations in manganese, ferroalloys, copper, gold, silver, and cobalt.

Located in the northern region of Rio de Janeiro, the Port of Açu is the largest deep-sea port complex in Latin America.

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