Ferrexpo, Salzgitter Flachstahl strengthen cooperation with new MoU for green steel production

Ferrexpo plc and Salzgitter Flachstahl GmbH, a subsidiary of Salzgitter AG, have announced a significant advancement in their partnership by signing a Memorandum of Understanding (MoU) to supply high-quality direct reduction (DR) iron ore pellets. This collaboration is a strategic move towards low-carbon steel production, aligning with Salzgitter’s SALCOS decarbonisation program.

Enhanced Collaboration for Sustainable Steel

The MoU facilitates the use of Ferrexpo‘s DR pellets in the SALCOS program, Salzgitter’s initiative aimed at transforming its steel production processes to hydrogen-based technologies. This agreement underscores both companies’ commitment to sustainable industry practices and the reduction of carbon emissions in steel manufacturing.

Strategic Implications of the MoU

This partnership marks a continuation of the collaborative relationship between Ferrexpo and Salzgitter, which began in 2016. The agreement ensures a steady supply of Ferrexpo’s high-grade iron ore pellets, essential for producing steel through hydrogen-based methods, which significantly reduce carbon emissions.

Comments from Company Leaders

Yaroslavna Blonska, Acting Chief Marketing Officer of Ferrexpo, commented on the agreement, stating: “As Europe transitions to greener steel production, it is gratifying to have agreed terms for our cooperation well into the future. Ferrexpo’s DR pellets can lower steel making emissions significantly as part of the SALCOS programme.” She also highlighted the broader economic benefits, noting the agreement’s positive impact on the Ukrainian economy during a challenging period.

Gerd Baresch, Technical Director of Salzgitter Flachstahl GmbH, expressed his enthusiasm: “We are delighted to continue our long-standing cooperation with Ferrexpo and look forward to intensifying these activities within the context of our SALCOS transformation programme.”

Future Outlook and Development

The SALCOS program is set to be technically complete by 2033, progressively converting Salzgitter’s steel production to be hydrogen-based. The MoU not only ensures high-quality raw materials for this transformation but also includes joint efforts to optimize green logistics chains, freight, and inventory management.

The partnership between Ferrexpo and Salzgitter Flachstahl GmbH represents a forward-thinking approach to tackling environmental challenges in the steel industry. By focusing on hydrogen-based steel production and high-quality raw materials, the companies are setting a benchmark for sustainability in industrial manufacturing.