On November 6th, at the 7th China International Import Expo, the Vale booth was officially unveiled. A Valemax type mineral sand ship model attracted the attention of the on-site audience, with a loading capacity of up to 400000 tons and equipped with a wind propulsion system. The installation and renovation of five "rotor sails" on the hull were completed by COSCO Shipping Group.
At the first CIIE, COSCO Shipping Group invited Vale to participate. From then on, the service trade exhibition area has a place for this mining giant. At the fourth CIIE, when iron ore crushing was still a conceptual product in the laboratory, Vale showcased its decarbonization concept in multimedia form. At the 7th CIIE, this experimental sample has officially entered the industrial mass production stage. Although it does not yet have the capacity for large-scale sales, Chinese steel mills have expressed strong interest in it.
During an interview with the Daily Economic News, Xie Xue, President of Vale China, stated that more than half of Vale's iron ore is sold to China, and it has supplied over 3 billion tons of iron ore and energy transition metal products such as nickel and copper. Vale has also closely cooperated with China in the fields of mining, infrastructure, logistics equipment, and service procurement. As a partner of the Chinese steel industry for over half a century, Vale will continue to provide assistance for the development of new quality productivity and the realization of green and low-carbon development in the Chinese steel industry.
Collaborative development of key technologies for hydrogen metallurgy
NBD: This year marks the 50th anniversary of the establishment of diplomatic relations between China and Pakistan. In the past half century of exporting to China, how do you view the growth potential of the Chinese market?
Xie Xue: We are very proud to have established a partnership with China that has lasted for over half a century. Our first shipment of iron ore exported to China was delivered in 1973, one year before Brazil and China officially established diplomatic relations. China has been our largest market since 2006, and this year our exhibition area is showcasing Vale's high-quality products and innovative low-carbon solutions in a more interactive way, as well as the latest cooperation between Vale and China in the fields of innovation and low-carbon.
This year marks the 50th anniversary of the establishment of diplomatic relations between China and Pakistan. In April, we launched the Low Carbon and Hydrogen Metallurgy Joint Laboratory with Central South University, which is a good example of deepening cooperation between China and Pakistan in the field of scientific and technological innovation. It can provide support for the basic theoretical research and key technology development of cutting-edge metallurgical technologies such as hydrogen metallurgy.
So as pioneers of China Pakistan cooperation, we have full confidence in the sustained development of bilateral relations between the two countries. We are honored to contribute to further enriching and expanding the bilateral partnership between the two countries, and we are also pleased to showcase our cooperation achievements at this year's CIIE.
NBD: At what stage have the basic theoretical research and key technological development of hydrogen metallurgy technology reached? What fields will it be applied in the future?
Xie Xue: As far as I know, in 2021, at the fifth meeting of the Science and Technology Innovation Subcommittee of the China Brazil High Level Coordination and Cooperation Committee (COSBAN), the cooperation between Vale and Central South University in low-carbon and hydrogen metallurgy research was discussed for the first time. In 2022, the two countries agreed to promote investment in low-carbon and clean technologies and deepen cooperation in scientific and technological innovation. In 2023, Vale implemented the results of the China Pakistan High Level Committee talks and officially announced a donation of 5.81 million US dollars to support the construction of a new low-carbon and hydrogen metallurgy laboratory at Central South University.
The laboratory is located in Changsha Yida Zhongjian Intelligent Technology Center, Changsha City, Hunan Province, with a total construction area of 3000 square meters and five floors. It is dedicated to conducting research on low-carbon sintering and pelletizing, efficient steelmaking, and hydrogen utilization. Therefore, the laboratory is equipped with more than 100 sets of equipment, including sintering ball devices, multifunctional high-temperature furnaces, and hydrogen reduction vertical furnaces.
These studies are mainly used to assist the steel industry in accelerating decarbonization and green transformation. We all know the urgency of climate change, and in order to achieve the "Scope Three" emission reduction targets, Vale has been helping steel industry customers reduce carbon emissions in production while supplying high-grade ore products. Among all the solutions, iron ore compaction is one, and the second is the use of alternative fuels such as green hydrogen.
Innovative block pressing process is greener and more economical
NBD: What is the current market demand for the innovative product of iron ore compaction? When can mass production be achieved?
Xie Xue: Iron ore compacts are a product developed by Vale over nearly 20 years that can be directly fired. They are made by pressing high-quality iron ore at low temperatures, giving the final product high mechanical strength. It can be used for direct reduction of vertical furnace process, producing green metal materials, and providing raw materials for the production of green steel; It can also be used in blast furnaces to replace sintering and pelletizing, thereby reducing greenhouse gas emissions generated in steel production by up to 10%.
At present, most direct reduction factories use iron ore pellets as raw materials, and Vale's pellet production process is an alternative to the pellet production process, which has lower production costs, lower investment intensity, and can reduce carbon dioxide emissions by 80% compared to pellets.
The first iron ore crushing plant has started operation in November 2023, located in the comprehensive operation area of Tubaland, Brazil. The second crushing plant is planned to start operation before the end of this year, and the total annual production capacity of the two plants will reach 6 million tons. In addition, this innovative low-carbon compaction product has also received participation from customer enterprises, with plans to build an iron ore compaction plant at the location of the steel plant and replace fossil fuels with green hydrogen.
In addition, we have been actively exploring with Chinese investors and partners the joint development of a giant hub in the Middle East (an industrial complex that produces hot pressed iron blocks through a direct reduction route). We believe there are huge opportunities within it. Compared with the long process route of blast furnace converter, using natural gas to produce hot pressed iron blocks can significantly reduce carbon emissions in the steel production chain. If green hydrogen is used instead of natural gas, it is even possible to achieve zero carbon emissions.
NBD: What responsibility do you think mining companies should take in promoting global sustainable development? How does the company consider its own green transformation while promoting the implementation of low-carbon solutions?
Xie Xue: At Vale, we deeply understand that innovation is an important focus to help us achieve our strategic goal of sustainable mining. Innovation runs through the entire company and permeates all levels of the organization, which is crucial for improving operational safety and reliability.
As mentioned earlier, we are innovating in multiple areas, including investing in technologies and solutions to support decarbonization in the steel industry, making our operations cleaner, promoting circular mining, and changing our operating methods to become safer and more competitive.
In order to enhance innovation capabilities, we have established a team dedicated to artificial intelligence projects, consisting of data scientists, engineers, and business experts. We have been exploring various ways to utilize artificial intelligence technology, such as optimizing asset management processes, improving the processing efficiency of iron ore and pellets, strengthening environmental controls, reducing health and safety risks, and compliance office controls.
In the areas of emission reduction in Scope 1 and Scope 2, our focus is on replacing fossil fuels such as diesel, natural gas, and smokeless coal with alternative low-carbon energy sources, as well as developing renewable energy. For example, in 2023, we completed a feasibility analysis test to replace 100% of the traditional solid fuel used in iron ore pellet production with biochar. Biochar is a renewable product obtained by carbonizing biomass.
A good example in the field of "Scope Three" emission reduction is our "Ecological Shipping Plan", which aims to reduce carbon emissions in iron ore shipping by utilizing various innovative technologies. In 2021, we applied our innovative rotary wing sail wind propulsion technology for the first time to a 325000 deadweight ton Guaibamax type ore carrier. Now, the rotary wing sail technology has been successfully applied to a 400000 deadweight ton Valemax type ore carrier, which is the largest in the world. We estimate that each ship can reduce 3000 tons of carbon dioxide equivalent emissions per year.