Home / News / Mining industry / Alisher Usmanov's USM Group will invest 40 billion rubles in a new HBI plant

Alisher Usmanov's USM Group will invest 40 billion rubles in a new HBI plant

Mining industry / Russia

The plant with a capacity of 2 million tons per year will be located in Zheleznogorsk, where the Mikhailovsky GOK of Metalloinvest, part of the USM group, operates. The GOK will become a supplier of iron ore raw materials for HBI production.

Alisher Usmanov's USM Group will invest 40 billion rubles in a new HBI plant

Alisher Usmanov's USM Group will build a plant for the production of hot briquetted iron (HBI) in the Kursk region worth over 40 billion rubles (excluding VAT).

The operator of the project, which will be implemented with the use of project financing, will be Mikhailovsky HBI LLC (MGBZh, 55% owned by USM, 45% owned by Metalloinvest's Mikhailovsky GOK).

Mikhailovsky HBI on Sunday signed a contract with a consortium of Primetals Technologies and Midrex Technologies for the supply of equipment for the new plant, the parties said. The contract includes the supply of equipment, engineering and consulting.

The design capacity of the plant will be more than 2 million tons per year, it will become one of the largest in the world for the production of this type of iron ore.

Production is slated to start in the first half of 2024. The raw materials for the new enterprise will be supplied by Mikhailovsky GOK.

“The new metallization plant is being designed on the principles of carbon-free metallurgy - with the prospect of a complete transition to the use of " green "hydrogen as a reducing agent. This project creates the basis for the development of "green " metallurgy and the transition of the global industry to environmentally friendly steel production technologies, "said Nazim Efendiev, CEO of Metalloinvest, whose words are quoted in the message.

The plant will enable the production of high quality HBI using the natural gas-based direct reduction process Midrex NG - the most environmentally friendly iron production technology. Compared to blast furnace iron smelting, the carbon footprint of Midrex NG is 50% lower. In the future, replacing natural gas with "green" hydrogen will allow to achieve even greater emission reductions, the press release notes.

By the end of 2020, Metalloinvest produced 7.8 million tonnes of hot briquetted and direct reduced iron. Global demand for these products is growing as the use of HBI reduces CO 2 emissions from electric steel production, and this aspect is becoming increasingly important for metallurgical companies amid tightening carbon regulations and the EU's plans to introduce a carbon tax. By 2030, steel production is expected to increase by 17%, to 2 billion tons, with more than 95% of the increase coming from steel smelting in electric furnaces.

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