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Brazil's Vale begins building US$340mn 'green' pig iron plant

Bnamericas Published: Wednesday, April 06, 2022
Brazil's Vale begins building US$340mn 'green' pig iron plant

The Brazilian mining giant Vale has started construction of a 1.6bn-real (US$340mn) plant to produce "green" pig iron in Marabá, Pará state, in the country's north.

The plant will be built by Vale subsidiary Tecnored, which is focused on developing a low-carbon pig iron process by substituting metallurgical coal with biomass as an energy source. 

"The implementation of Tecnored represents an important step in the transformation of mining, contributing towards an increasingly sustainable process chain. The Tecnored project is very important to Vale and will provide competitiveness, environmental sustainability, and development to the region," said Vale CEO Eduardo Bartolomeo in a statement. 

The plant will initially have a production capacity of 250,000t/y of pig iron and output could be expanded to 500,000t/y year in the future. Start-up is planned for 2025, according to Vale.

Due to fewer productive stages, such as the absence of the sintering and coking stages, the Tecnored technology is expected to be 10-15% less capital- and operating cost-intensive than traditional blast furnace technology.

Tecnored's plant is part of Vale's effort to develop new technologies and offer steelmaking customers technological solutions to aid with their decarbonization investments in production processes. 

This will contribute to Vale's commitment to reduce 15% of net Scope 3 emissions by 2035. Vale is also looking to reduce its absolute Scope 1 and 2 emissions by 33% by 2030 and achieve net-zero by 2050.

POLITICAL ELEMENT

Vale also hopes that the investment it is making in the plant will help reduce pressure from Pará state politicians against the company.

Since last year, legislators in Pará have been conducting an investigation, via a special commission, into mining costs and the benefits for the state.

State legislators have complained that the company invests little in the state in terms of production units with higher added value, only focusing its efforts on mineral extraction. Pará is key for Vale, as it is an iron ore, copper and nickel hub. Vale's Carajás mine, the world’s largest iron ore operation, is located in the state.

The firm has come under increasing pressure as high iron ore prices have generated record revenues, while other business sectors and state and local governments have faced financial difficulties due to the ongoing effects of the pandemic.

Last year, Vale posted a record US$22.4bn profit for a Brazilian listed company, more than four times the US$4.88bn it reported in 2020.

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