Investor News

HydroMOR: Battling the laws of steelmaking chemistry with a new approach

The steel, cement and aluminium industries account for 30% of global carbon dioxide (CO2) emissions.

A recent article in the Fin Review ($) by Simon Evans and Brad Thompson highlighted the challenge facing companies striving to eliminate or reduce their CO2 footprint by 2030, noting that a 'game-changer' is needed to 'unpick tough carbon chemistry'.

Here at ECT, we approach the 'carbon' problem from outside the box.

Take lignite (brown coal) drying, for example.

High moisture is the problem. It's why lignite-fired power stations emit more CO2 per unit of electricity than black coal or natural gas-fired power generation.

Industry and government have spent an estimated $400 million over several decades in the quest for a solution to this particular fundamental lignite problem without success.


They all took a 'heat and/or squeeze' approach.

High heat and high pressure require high energy. High energy generally means higher cost, making it a negative-sum game. Processes that involve 'squeezing' the moisture from hot lignite resulted in a wastewater treatment issue, adding additional cost.

They weren't economically viable.

Our Coldry process is counter-intuitive, employing low temperature and low pressure.

This is made possible by understanding and working with, rather than against, brown coal's natural chemistry and physical characteristics.

It involves harnessing a natural phenomenon known as 'brown coal densification', which causes moisture to be released and the remaining dry matter to shrink and harden. Specific processing conditions can trigger this, allowing the expelled moisture to be removed via low-temperature evaporation using waste heat from the adjacent power station.

Low temperature and low pressure equal higher efficiency and lower cost.

The result is the world's only zero-emission, cost-effective lignite drying technology. It is the 'gateway' to lower-emission power generation and higher-value downstream applications like char, gas, fertiliser, diesel, and hydrogen.

This approach to innovation extends to our unique steelmaking process, HydroMOR: Hydrogen Metal Oxide Reduction.

But before we discuss HydroMOR, let's review the article to understand why the carbon chemistry of steelmaking is so challenging.

Evans and Thompson note:

No matter how much they convert to using renewable energy sources to power industrial factories and plants, the chemical reaction involved in making steel and cement produces vast amounts of carbon dioxide.

We understand chemistry isn't everyone's thing, so in layman's terms, here are the basics.

Iron, in its natural form, is found as iron oxide, commonly referred to as iron ore. It's iron chemically bound to oxygen. The two main sources are Hematite (Fe2O3) and magnetite (Fe3O4).

The chemical process of converting the iron ore to iron is called 'reduction'.

Chemical reduction via the carbon-based reaction has proven to be the most scalable and economical method.

The blast furnace process is the dominant process globally for primary iron making. Natural gas or coal-based direct reduction rotary kilns are a distant second.

Essentially, iron ore (Fe2O3) and coal (containing carbon) are heated in a blast furnace. The coal combusts, giving off carbon monoxide (CO).

Fe2O3 + 3CO > 2Fe + 3CO2

In this reaction, the iron oxide is reduced to iron, and the carbon monoxide is oxidised to carbon dioxide.

The molten iron is refined and formed into products for use in manufacturing and construction.

In addition to the CO2 emissions from the chemical reaction in the blast furnace, preprocessing of raw materials also required:

  • Coke ovens - Coke, the source of the carbon for the chemical reaction, is made from coking coal, a CO2-intensive process.
  • Sinter plant - the iron ore is combined with limestone and heated. The limestone helps deal with impurities in the ore and coal during smelting.

Blast furnaces operate at 1300-1500 degrees Celsius temperatures, making them energy-intensive. That energy is provided by coal or gas.

The article quotes Mark Vassella, the chief executive of Australia's largest steelmaker, BlueScope, on the importance of distinguishing the carbon needed to achieve the chemical reaction and any CO2 emitted as a function of providing energy to the steelmaking process:

"Carbon reduction is a key focus, recognising that carbon is an essential part of the chemical reaction that processes iron ore into iron,"

"This means a significant proportion of steel's carbon footprint is linked to the chemistry of making steel rather than the energy required.''

The article highlights the effort and struggle of the likes of Bluescope and Rio Tinto to reduce CO2 due to the chemical and heat requirements, neither of which can be supplied by wind or solar.

CO2 capture and storage (CCS) is already technically feasible, but it adds considerable cost.

Hydrogen is briefly mentioned as a distant, aspirational prospect for replacing carbon, as the only emission is water vapour.

The concept of hydrogen-based reduction of iron ore isn't new.

It's just that historically, sources of carbon have been readily accessible and affordable. Unlike carbon (think coal, oil and natural gas), hydrogen isn't found anywhere in nature on its own. Hydrogen needs to be produced either by splitting water (hydrolysis) or cracking natural gas (steam methane reforming).

Splitting water is energy-intensive (i.e. expensive), and cracking natural gas, while cheaper, is CO2 intensive.

The current barriers to adopting hydrogen-based reduction are the cost and scalability of renewable hydrogen generation and the cost of electricity storage for reliably powering an electric arc furnace.

Our unique HydroMOR process is an alternative approach that competes with the blast furnace on cost while delivering lower CO2 intensity. It allows us to bridge the gap between today's high-emission steelmaking and tomorrow's low—or zero-emission future.

HydroMOR is the most significant shift in approach to primary iron production since the advent of coke-based steelmaking in 1709, breaking the carbon mould in three ways:

  1. Inputs:
    • Lignite—HydroMOR is the world's first and only lignite-based primary iron-making process, replacing expensive coking coal. HydrMOR uses lignite as a reductant and heat source—no other technology does this.
    • HydroMOR can use 'waste' iron ore fines and slimes to replace premium lump iron ore. In places like India, around 30% of the ore extracted from the ground ends up as fines and slimes.
  2. Hydrogen-based:
    • HydroMOR is dominated by a hydrogen reduction reaction instead of the traditional carbon-based reduction reaction
    • Most of the carbon from the lignite is deposited in solid form within the process, reducing CO2 output
  3. Lower cost plant design:
    • HydroMOR employs our unique vertical furnace that works with the natural chemistry of brown coal to produce hydrogen in situ
    • The HydroMOR plant, incorporating Coldry as its front-end raw material preparation stage, is up to 40% less capital-intensive than an equivalent capacity blast furnace or coal-based DRI plant
    • Relatively low operation temperatures reduce the material capital cost of plant
    • Smaller equipment sizes, when compared to existing steel production processes, result in reduced land area requirements
    • Efficient reaction kinetics result in lower reductant requirements when compared to DRI technologies
    • Simple equipment design facilitates low maintenance requirements, high asset availability and a long production lifetime
    • Simple process flow and high levels of process automation allow for low operational staffing requirements
    • Very low water consumption compared with other DRI technologies

How HydroMOR works:

  • Lignite and iron ore are combined and dried using our Coldry process to form 'composite pellets'
  • Composite pellets are continuously fed to our unique furnace (continuous vertical retort)
  • Gasification of the volatile matter in the lignite produces hydrocarbon gases such as methane (CH4)
  • Catalytic thermal decomposition of the hydrocarbon gas produces hydrogen (CH4 > C + 2H2)
  • Hydrogen reduces the iron oxide to iron, producing H2O or water-gas
  • Reactions within the retort result in the chemical looping of hydrogen, amplifying the reduction reaction
  • Much of the carbon is deposited in solid form, reducing CO2 emissions

Not only does HydroMOR offer a hydrogen-based chemical pathway today, but it is also characterised by two distinct additional economic advantages:

  1. Alternative raw material opportunity
  2. Lower plant cost

The ‘alternative raw material’ opportunity

There exists a vast, ‘above-ground ore body’ in the form of iron ore mine fines and slimes and industrial wastes such as mill-scale and nickel refinery tailings.

Current processes can’t utilise fines and wastes without expensive pre-processing. HydroMOR liberates this often stranded resource in an efficient, cost-effective manner.

HydroMOR enables a lower-cost primary iron production pathway by leveraging two unique features:

1. Decoupling iron making from coking coal

By utilising the rich organic chemistry within low-rank coal, the HydroMOR process utilises a different chemical pathway to deliver a high-quality product without needing high-quality coking coal, resulting in decreased raw material cost and diversified supply options.

2. Exploiting the ‘above-ground ore body’

By harnessing the vast ‘above-ground ore body’ that exists as mine tailings, fines, and slimes and from industrial wastes such as mill-scale and nickel refinery tailings, HydroMOR is able to leverage sunk mining and processing costs by providing a waste remediation solution that turns a contingent liability into a revenue stream.

Tailings storage locks up significant swathes of valuable land. HydroMOR minimises waste, releasing land for productive use.

Where to next?

HydroMOR is poised to progress to pilot scale before commercial deployment.

The successful commercialisation of HydroMOR would be a game-changer for countries with brown coal resources. It would provide a new, high-value application for a currently low-value, much-maligned resource while reducing steel industry CO2 intensity compared to traditional carbon-based methods.

HydroMOR isn't a silver bullet for the entire industry globally, but it's certainly a significant advancement and is the only process under development that can reduce CO2 intensity without additional cost.