Decarbonising the steel industry will require an increase in high-grade iron-ore production and improved beneficiation techniques, finds a new report from research institution Institute for Energy Economics and Financial Analysis (IEEFA).

The report, titled ‘Iron-Ore Quality a Potential Headwind to Green Steelmaking’, is co-authored by energy finance analyst Simon Nicholas and steel sector energy finance analyst Soroush Basirat.

The report states that to reach net-zero emissions by 2050, steelmakers must switch production methods from blast furnaces that consume coal to green-hydrogen-based direct reduced iron (DRI) processes.

However, DRI technology requires a higher grade of iron-ore than blast furnaces – typically at least 67%.

"Iron-ore miners continue to be largely focused on producing lower quality blast furnace-grade iron-ore as this coal-consuming technology still produces the great majority of the world’s steel,” says Nicholas.

Basirat explains that deposits of high-grade iron-ore are scarce, but notes that mining options are available to alleviate the direct reduction-grade (DR-grade) iron-ore supply issue.

“Increased focus on magnetite mining is one option. Magnetite iron-ore is often more suitable and preferable for further processing and producing iron-ore concentrate and pellets of DR-grade quality,” says Basirat.

“There may also be the possibility of beneficiation of some existing iron-ore production towards DR-grade.” 

Strategic research provider Bloomberg New Energy Finance (BNEF) anticipates 59% of primary steel production coming from DRI-electric arc furnace (EAF) processes by 2050 under a net-zero steel sector scenario.

“This would mean 889-million tonnes of steel production from DRI-EAF by 2050, requiring a tenfold rise in DR-grade iron-ore supply unless technology innovations allow DRI processes to use lower-grade ore,” says Basirat.

“Fortunately, such technology innovations are being developed, providing a potential solution to the DR-grade iron-ore supply issue.”

German steelmaker thyssenkrupp is planning to begin replacing its blast furnaces with DRI plants that include an integrated melting unit (submerged arc furnace) from 2025. The resultant liquid iron will then be converted to steel in the company’s existing metallurgical plant.

“This technology configuration will allow thyssenkrupp to use blast furnace-grade iron-ore in their DRI processes,” says Nicholas.

“Iron and steel mills company ArcelorMittal and steel manufacturer BlueScope Steel are also examining similar DRI-melting unit combinations that would allow the use of blast furnace-grade iron-ore in direct reduction processes.”

Nicholas says, when it comes to carbon emissions, steel has a reputation as a ‘hard to abate’ sector.

“The challenge imposed by limited DR-grade iron-ore supply on plans for a large global scale-up of DRI production is significant. Given long mining lead times and technology development requirements, the focus on potential solutions must increase immediately,” Nicholas concludes.