Vale has been selected by the US government to begin negotiations for the award of an iron ore briquette plant construction for up to $282.9 million. The Brazilian miner will thereby expand production of its new type of briquettes.

The project will be executed under the Bipartisan Infrastructure Law and Inflation Reduction Act funding, as part of the US Industrial Demonstrations Program, Vale explains.

“The selection by the US Department of Energy represents a path for the validation of Vale’s proprietary cold-agglomeration technology, and its potential to deliver a transformative solution to decarbonise the steel sector,” the company says in a note sent to Kallanish.

The building of a briquette plant in the US would feed third-party direct reduction facilities. That process would use natural gas, which could later be replaced by green hydrogen. Vale is already using this model in the Middle East.

The product is adapted for direct reduction for steelmaking. It can also however be used as a charge for blast furnaces, reducing the emission of pollutants and greenhouse gases when compared to traditional processes of iron ore agglomeration – pelletising and sintering.

Vale officially inaugurated its maiden iron ore briquette plant in Brazil in December. The second facility at the Tubarão Unit in Vitória is in the commissioning phase. When it is operational, Vale will have a briquette production capacity in Brazil of 6 million tonnes/year. The total investment is $256 million.