SA perfectly placed to lead “green-steel revolution”, needs expanded domestic beneficiation policies

Amit Saini, a director at Eastern Cape-based Coega Steels Pty Ltd, does not doubt South Africa can be Africa’s green-steel hub. Pictured are steel billets produced in the Gqeberha mini mill’s induction furnace. (Image supplied) Supplied

This reflects the significant contribution being made by secondary steel producers to the economy and efforts to curb carbon emissions.

Green steel

While the respective outputs are relatively on par, the biggest differentiator is that mini-mills emit roughly four to five times less carbon than primary steel producers.

Amit Saini, one of the directors of Eastern Cape-based mini mill Coega Steels Pty Ltd, explains that the manufacture of so-called “green steel” has gained greater prominence as industries embraced sustainable practices to mitigate environmental impacts.

“This shift is driven by increasing regulatory pressures, consumer demand for eco-friendly products and international commitments to reduce carbon emissions under pacts such as the legally-binding Paris Agreement on climate change,” says Saini.

He adds, “Steelmaking through scrap recycling is the leading and foremost method of green steel production.

“Recycling scrap metal significantly cuts carbon emissions compared to traditional methods.”

India a global leader

India has already established itself as a global leader in the green-steel sector.

In terms of new guidelines released by the South Asian nation, steel with a carbon footprint of fewer than 1.6 tonnes of carbon dioxide equivalent (CO2e) per tonne of finished steel (tfs) is defined as five-star green steel.

That with emissions of 1.6 to 2.0 tonnes is rated four-star while 2.0 to 2.2 is three-star.

Saini says this landmark policy underscores the importance of setting clear guidelines to promote green steel.

The US and many European countries have also implemented stringent green-steel standards.

“These developments highlight the competitive advantage of green steel, which is sold at a premium in international markets due to its lower environmental impact,” says Saini.

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SA perfectly placed to lead “green-steel revolution”

Aside from the scrap recycling aspect, the significantly lower carbon footprint is also attributable to the type of furnace being used – whether electric arc (EAFs) or induction, the latter of which is operational at Coega Steels.

The Gqeberha mini mill’s furnaces are only able to process ferrous material containing iron and melt metals by way of electromagnetic induction.

Blast furnaces, on the other hand, produce steel from iron ore, coke and limestone.

Saini says it is increasingly clear that South Africa is perfectly placed to lead the “green-steel revolution” in Africa, given its strategic position in regional and global markets.

“We have the biggest base of mineral resources compared to other African countries. These carry an estimated value of $2.5tr (R44tr).”

He explains that while coal is widely used domestically (nearly 75% of its mined volume is used for, among others, electricity, chemical and liquid fuel production) and the balance exported, the story is different for iron ore.

Domestic beneficiation policies

He further says that more than 90% of iron ore mined in SA is being exported due to limited domestic beneficiation (enhancing the economic value of raw materials) and constraints in the primary steel sector’s manufacturing capacity.

“SA should expand domestic beneficiation policies to include iron ore and coal, thereby enhancing their local value addition and reducing the reliance on exports,” he states.

To maximise the country’s potential as a continental leader, it is imperative to revitalise the primary steel sector’s manufacturing capacity.

“This should be done through targeted investments and policy incentives to develop mechanisms that will ensure cost-effective procurement of raw materials for domestic steel producers, therefore enhancing competitiveness.

He adds that by using iron ore to produce Direct Reduced Iron (DRI), they can alleviate potential scrap metal shortages in the domestic market in the future.

“It is a viable substitute for scrap and aligns well with the future of steel production in the country, particularly given the increasing adoption of EAFs over the next few years.”

Benefits of DRI-based steel production

DRI-based steel production offers various benefits.

It is less harmful to the environment and can ensure sustainable growth in steel production should SA reach a saturation point in scrap availability.

Saini says while the country currently lacks a merchant/trading DRI plant, affordable raw materials would become accessible to existing producers.

“Thereby encouraging new production capacity, should iron ore and coal beneficiation policies be promulgated.”

He adds since South Africa had received more than $4bn (R73bn) in funding from bilateral and multilateral sources to help reduce carbon emissions, there was an obligation to implement actionable plans that aligned with global climate goals.

“Promoting green-steel production is a practical and impactful way to meet these commitments.”