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ArcelorMittal buys Pecém steel mill with an eye on green hydrogen

"There is significant potential to decarbonise the asset," said group CEO Aditya Mittal.



The presence of a green hydrogen hub to be installed in the port of Pecém, in Ceará, was pointed out as one of the reasons behind the purchase of Companhia Siderúrgica do Pecém (CSP), announced yesterday by ArcelorMittal, for R$ 11.4 billion. One of the main transactions of the Brazilian steel industry in recent years, the deal consolidates Arcelor's leadership in flat steel in Brazil – and shows how access to clean energy and low carbon sources is entering the companies' strategic map.


“There is significant potential to decarbonise the asset, given the state of Ceará’s ambition to develop a low-cost green hydrogen hub and the enormous potential the region has for solar and wind power generation,” said Aditya Mittal, CEO. from ArcelorMittal, in a press release.


CSP was a joint venture made up of Brazil's Vale (50%) and South Korea's Dongkuk (30%) and Posco (20%) and Arcelor bought Vale's stake. The acquisition will still be analyzed by Cade until the end of 2022.


Green hydrogen in the northeast

Northeast Brazil is on the global green hydrogen route because of its abundant sun and good winds. Porto do Pecém, in Ceará, has one of the most advanced projects in the production of the commodity and estimates that it should start manufacturing the product at the end of 2025, but there is still no forecast for the start of works.


In addition to Porto do Pecém, there are projects under study in the ports of Suape, in Pernambuco, and Açu, in Rio de Janeiro, but they are still on paper.


So far, Unigel, which is located in the petrochemical complex of Camaçari (BA), is the only company that has kick-started the construction of a green hydrogen plant. With an estimated investment of US$ 120 million, the Unigel factory will start producing in 2023. The production capacity will be 10 thousand tons of green hydrogen per year.


How hydrogen is used in the steel industry

In the steel industry, green hydrogen can be used to replace part of the burned coal (coke) used as fuel in blast furnaces for steel production. This is one of the strategies studied by ArcelorMittal in plants in Spain and Germany.

In Canada, the steelmaker managed to replace natural gas with green hydrogen in a process step called iron reduction, which generates 75% of the carbon emitted in the industrial process.


All these initiatives are part of ArcelorMittal's goal of reducing the CO2 intensity in its products by 25% by 2030 and achieving carbon neutrality by 2050. Source: https://www.capitalreset.com/arcelormittal-compra-siderurgica-pecem-hidrogenio-verde/


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