Modern Mining March 2023
MINING INDABA REVIEW
CRU unpacks the role of Africa’s bulk metals
Underpinned by high population growth, which recently ballooned to over 8 billion people, demand for steel used in infrastructure development will continue to grow apace to meet global population needs. According to the United Nations, the world’s population is expected to increase by nearly 2 billion people in the next 30 years, from the current 8 billion to 9.7 billion in 2050, which bodes well for the steel industry, and subsequently, the iron-ore sector.
S teel is used predominantly in buildings, large scale infrastructure developments, the automo tive industry and household goods. Although Africa currently accounts for just 5% of global iron-ore exports, it is expected to gain market share as key iron ore projects come online to meet growing demand, says CRU’s head of steelmaking raw mate rials, Erik Hedborg. CRU (Commodities Research Unit) provides business intelligence on global met als, mining, and fertilizer industries. As steelmakers race to reduce their carbon emissions, demand is growing for higher-grade, lower-impurity iron ore – essential for steel production. Rio Tinto’s Simandou mine in southern Guinea’s Nzérékoré region represents one of the largest iron ore reserves in Guinea, and in the world, with reserves of 2.4 billion tonnes. When the project, which has been challenged by legal battles, comes online, it could push the continent’s contribution to as much as 10% of global iron ore share, says Hedborg, adding that Simandou is a very important project that could shake up the market, increase Africa’s rel evance on the supply side and set the continent to become the third largest exporter of iron ore, taking up 10% of market share. As businesses across the globe work towards decarbonisation and energy transition, the steel industry, which accounts for 7% of global carbon emissions, will need to transform and significantly reduce its levels of CO 2 emissions, and for that high grade iron ore is needed.
Africa currently accounts for just 5% of global iron-ore exports.
Currently much of the carbon emissions ema nate from China, which accounts for up to 55% of global steel production, meaning China will need to lower its rate of carbon emissions rapidly. And one of the best ways to achieve lower emissions, says Hedborg, is to use recycled steel. However, the challenge with recycled steel is limited availability of supply. Currently, the largest volumes of scrap sit with Europe and the United States and not with China and India, the countries in need of steel scrap. The first constraint, explains Hedborg, is the limited availability of scrap metal while the second constraint is that recycled steel accumulates large quantities of impurities, which negatively impact the quality of the steel produced. The best way to produce high quality steel, is by adding iron ore to the mix. Another challenge impacting producers looking to lower their carbon footprint relates to the energy source used to produce steel. As Africa has abun dant sources of coal, it is the predominant energy used; however, steel manufacturers across the globe are currently evaluating hydrogen as a source of clean energy, though given the exorbitant cost associated with producing hydrogen, the industry remains hamstrung. The good news, says Hedborg, is that there is some leeway to meeting climate change targets set for 2050 – this is relevant as there are still a number of coal-powered steel manufacturing sites in China and Europe. Once a blast furnace starts produc tion, it has a lifespan of between 10 to 15 years, with invested companies not expected to cease operat ing their production facilities any time soon. On a positive note, steel producers in Europe, including those in Sweden, Germany, France and
Iron ore is an essential feedstock for steel production.
26 MODERN MINING March 2023
Made with FlippingBook - Online magazine maker