Vale and H2 Green Steel sign agreement to study the development of green industrial hubs in Brazil and North America

Vale and H2 Green Steel have signed an agreement to jointly study the feasibility of developing green industrial hubs in Brazil and North America, enabling sustainable steel production.  

In such industrial centers, H2 Green Steel is exploring to produce low-carbon steel value chain products, such as green hydrogen and hot briquetted iron (HBI), using iron ore briquettes produced by Vale as input material and renewable electricity as the energy source for its hydrogen production.  

This initiative reinforces Vale's role as a driver of Brazil's low-carbon industry.

"With this agreement, we are in Brazil partnering with a green iron and steel producer that is at the forefront of global decarbonization, while fostering the low-carbon industry and stimulating the green hydrogen chain in the country," says Vale's president, Eduardo Bartolomeo. "At the same time, we are investing in decarbonizing our operations and expanding renewable energy capacity in Brazil, fulfilling our vocation as an anchor of regional development, as we have always done throughout our history."  

H2 Green Steel is a Swedish industrial startup that was founded in 2020 and has already begun construction of its first large-scale steel mill in Boden, in Sweden, using green hydrogen.

"We announced early on our journey that we want to explore other geographies where we can accelerate the decarbonization of the steel value chain. Both Brazil and parts of North America have great potential due to the access to both renewable energy sources, high quality iron ore, and political willingness to support decarbonization projects and it's a great opportunity for us to explore our partnership with Vale beyond the pellet supply to our flagship plant in Boden," explains Kajsa Ryttberg-Wallgren, EVP Growth and Hydrogen Business of H2 Green Steel.  

In the green industrial hubs, Vale is expected to build and operate briquette plants, which will feed direct reduction reactors for the production of HBI and other metallics. The number of industrial hubs that will be built, their location and production capacity will be defined following feasibility studies to be developed jointly by the two companies.   

In July, Vale and H2 Green Steel also signed an agreement to supply direct reduction pellets to the Boden plant. Vale expects to reach a production capacity of 100 million tons of agglomerates (briquettes and pellets) after 2030.  

"We see great potential in Brazil as a hub for low-carbon steel products," says Vale's Vice President of Iron Ore Solutions, Marcello Spinelli. "The country offers conditions such as high-quality iron ore and great availability of renewable energy, including wind and solar, supporting the production of green hydrogen. Vale has been contributing by offering premium iron ore and developing high value-added products, such as briquettes and pellets, and innovative business models, such as these green industrial hubs."