"Green Iron Revolution" presentation by OECD Senior Economist Gianpiero Mattera at the Global Steel Summit

In the production of green iron, shortages of high-quality iron ore pose risks

At the 2nd Global Steel Summit in Dubai, OECD Senior Economist Gianpiero Mattera's presentation “The Green Iron Revolution: Building New Evidence and Promoting Global Dialogue”.

Mattera underlined that iron ore production and exports are focused on a few countries around the world, with Australia and Brazil being leaders in this field. However, he pointed out that players such as MENA (Middle East and North Africa) countries are playing important roles in the production of Direct Reduced Iron (DRI). The transition to green iron production requires new inputs such as renewable energy and high quality iron ore.

Company Strategies and Green Projects

Mattera's report analyzed 133 projects in different regions by 18 major companies operating in the global steel and iron industry. Of these projects, 51 are hydrogen-based, while 21 are focused on producing green iron using renewable energy. However, it was noted that only 3 projects have been completed or are in the process of completion, while the other projects are in the planning or announcement phase. Thirteen of the green iron projects are located in countries other than company headquarters, often in areas with a large supply of renewable energy or close to iron ore mines, and involve partnerships with the energy sector.

 High Quality Iron Ore and the Need for Renewable Energy

The success of green iron production depends on high quality iron ore and abundant renewable energy resources, the presentation said. However, mine-level investigations show that there are only a few mines producing iron ore of sufficient quality. This necessitates large investments to secure the high quality iron required for DRI and HBI production.

Increased demand for green DRI and HBI is expected to increase price premiums for high-grade iron ore, which may encourage companies to invest in iron beneficiation solutions. However, the scarcity of high-quality iron may create conditions that reduce competition and increase the market power of some companies.

In this perspective, the green iron revolution presents significant opportunities for the sector, but also challenges and risks.