Steel is one of the world’s most important engineering and construction materials, critical to the successful roll-out of energy transition infrastructure and to support on-going socioeconomic development. It is used in every aspect of our lives – from cars to domestic appliances, from building and construction to cargo ships and surgical scalpels.
Steel production has reached record heights in 2023, while the World Steel Association projects a 1.7% growth in demand in 2024 globally, with a significant proportion being driven from Asia, as the continent’s economies experience rapid urbanisation and demand higher living standards. Meeting this demand will require in excess of 1.85 billion tonnes of steel1.
The steelmaking industry, however, is one of the main sources of carbon emissions globally. Decarbonising it presents complex challenges and will require the development of new pathways for more sustainable steel production.
Our recently signed collaboration agreement with Meranti Green Steel is testament to Anglo American’s approach to work with customers to achieve our ambition to reduce our Scope 3 emissions. With the majority of Anglo American’s Scope 3 emissions linked to materials – steelmaking coal and iron ore – sold into the steelmaking industry, the steel value chain is central to our decarbonisation efforts.
The collaboration will focus on accelerating the adoption of less carbon intensive production technologies, such as direct reduced iron (DRI) and electric arc furnace (EAF), using Anglo American’s premium quality iron ore products from South Africa’s Kumba mines and Brazil’s Minas-Rio mine.
The agreement includes a focus on efficient product delivery by using Anglo American’s ocean freight decarbonisation framework, built on coordinated efforts around route and vessel size optimisation and the introduction of alternative, more sustainable fuel options.
The two companies will also seek to map the product’s journey with the use of digital traceability technology, providing visibility of relevant provenance and other sustainability-related indicators.
Timo Smit, Anglo American’s Executive Head of Marketing of Iron Ore, said, “With rapidly rising living standards and growing urbanisation, Southeast Asia is set to be a catalyst for steel demand and a key geography for the roll out of the infrastructure needed for ongoing global socio-economic development.
“High-quality, responsibly produced iron ore from our operations can play an important role in enabling and accelerating the adoption of lower carbon steelmaking technologies, and close collaboration with like-minded industry partners is key to our efforts in this space.”
Sebastian Langendorf, CEO of Meranti Green Steel, said, “The collaboration with Anglo American is a great opportunity for Meranti. Not only will it give us further access to high-grade iron ore pellets and a certain amount of premium lump, the collaboration also enables us to work together with a world-class partner on responsible shipping and on advanced digital solutions for the reporting of reduced CO2 emissions.
“We share with Anglo American a strong commitment to decarbonisation, in the pursuit of Meranti’s vision to create a world where development and nature can be in balance. We look forward to our cooperation with Anglo American.”
Meranti Steel is a steel producer with operations in Southeast Asia. The company is building an integrated DRI and EAF plant in Thailand under the Meranti Green Steel brand.
Read more on pathways to greener steelmaking here.
1 https://worldsteel.org/media-centre/press-releases/2023/worldsteel-short-range-outlook-april-2023/