Vale and RCJY forge partnership for Ras Al-Khair Mega Hub to boost green steel production

Vale, a leading name in sustainable mining, has entered a pivotal land reservation agreement with the Royal Commission of Jubail and Yanbu (RCJY) to establish a “Mega Hub” at Ras Al-Khair Industrial City in Saudi Arabia. This groundbreaking project is designed to meet the growing demand for sustainable steel production, aligning with global decarbonisation goals and Saudi Arabia’s Vision 2030 for economic diversification and industrial innovation.

What is the Ras Al-Khair Mega Hub?

The Ras Al-Khair Mega Hub represents Vale’s commitment to fostering low-carbon steelmaking. Planned for development in two phases, the facility aims to produce up to 12 million tonnes of cold-briquetted iron ore (CBI) annually. CBI serves as a sustainable alternative to traditional steelmaking raw materials, significantly reducing carbon emissions. This initiative is expected to advance the global steel industry’s transition toward net-zero emissions.

Rogério Nogueira, Vale’s Executive Vice President of Commercial and New Business, highlighted the project’s significance: “This agreement is more than a milestone for Vale; it’s a transformative step for the future of the steel industry in the Middle East. Ras Al-Khair will become a model for integrating advanced technologies with sustainable practices, creating both environmental and economic value.”

The choice of Ras Al-Khair underscores Saudi Arabia’s competitive advantages, including ample energy resources, a strategic location connecting global markets, and a pro-business regulatory environment.

How Does This Align with Global Decarbonisation Goals?

Vale’s Mega Hub in Ras Al-Khair is part of the company’s broader strategy to develop integrated ecosystems that support low-carbon steelmaking. These hubs, located in Saudi Arabia, the United Arab Emirates, and Oman, are intended to drive the steel sector’s decarbonisation by supplying high-grade, low-carbon iron ore products.

Eduardo Bartolomeo, Vale’s CEO, stressed the significance of these initiatives in achieving sustainability targets: “Our Mega Hubs will ensure the availability of high-grade materials while fostering the expansion of low-carbon steel production globally. This is essential to achieving our target of reducing net scope 3 emissions by 15% by 2035.”

One key feature of the Ras Al-Khair hub is its planned use of natural gas to produce hot-briquetted iron (HBI), which emits approximately 60% less CO2 than traditional pig iron production methods. Future integration of renewable energy and hydrogen-based processes could potentially eliminate emissions entirely, setting new benchmarks for the industry.

What Are the Economic and Environmental Benefits?

Beyond environmental impact, the Ras Al-Khair Mega Hub is poised to deliver substantial economic benefits. It aligns with Saudi Arabia’s Vision 2030 to establish the Kingdom as a global industrial powerhouse. The hub will not only create local jobs but also strengthen the region’s position as a leader in sustainable industrial practices.

Marcello Spinelli, Vale’s Executive Vice President of Iron Ore, highlighted the Middle East’s strategic role: “The region’s competitive energy prices, prime geographical position, and entrepreneurial mindset create unparalleled conditions for developing integrated steel hubs. This initiative supports global decarbonisation efforts while catering to increasing demand for high-grade iron ore.”

What Role Do Green Briquettes Play in the Decarbonisation of Steelmaking?

Vale’s introduction of green briquettes has been pivotal to its sustainable mining efforts. Developed over nearly two decades, these briquettes provide a low-carbon alternative to traditional raw materials used in steelmaking. When utilised in the direct reduction method, such as in the planned Mega Hubs, they offer an even greener solution, reducing emissions by up to 10%.

To date, Vale has partnered with over 30 global steelmakers, representing around 50% of its scope 3 emissions. These collaborations aim to accelerate the adoption of sustainable practices across the steel industry.

How Does This Partnership Shape the Future of Steelmaking?

The Ras Al-Khair Mega Hub is set to become a cornerstone of the global green steel movement, offering a scalable solution for the industry’s decarbonisation. It reflects Vale’s ambitious commitment to reducing its absolute scope 1 and 2 emissions by 33% by 2030 and achieving net-zero emissions by 2050.

This agreement also exemplifies the collaboration between Vale, RCJY, and regional stakeholders to advance sustainability and innovation. By investing in cutting-edge technologies and fostering partnerships, Vale is helping to build a more sustainable future for the global steel industry while contributing to Saudi Arabia’s economic transformation.