The Importance of Iron
Iron is often viewed as a boring metal by investors. It mostly follows global economic cycles and is unlikely to have any narrative tied to it. No one expects iron demand to triple in the next decade because of battery demand, solar panel production, an aerospace boom amid a space race, or mounting risks of global conflict.
But this can also be a quality. Approximately 90% of all metal that is refined nowadays is iron.
Iron and steel (made of 97% iron) are absolutely omnipresent in everything we use daily in the modern world:
- Infrastructure: bridges, railroads, harbors.
- Construction: reinforced concrete, beams, roofing, nails & screws, etc.
- Transportation: cars, trains, ships.
- Industrial uses: pipes & pipelines, storage tanks, heavy machinery,
- Defense: warships, tanks, artillery shells, guns, bullets, etc.
- Energy: furnaces, turbines, wind turbine pillars, solar panel frames, etc.
- Healthcare: beds, surgical instruments, etc.
- Consumer goods: kitchen appliances, appliances, fireplaces, etc.
However, producing iron is unfortunately a very carbon-intensive process, mostly reliant on a special type of coal: coking coal.
Some attempts have been made to replace coking coal with green hydrogen, but only very high-quality iron ore can be used with hydrogen. Cheaper ore with lower iron content would be required to compensate for the higher costs of hydrogen compared to coal.
We previously discussed that the traditional blast furnace procedure could be replaced by a new process called flash iron smelting, more akin to an explosion than a slow melting of the ore.
Researchers from the University of Oregon are investigating an even more intriguing possibility: doing away with high temperatures, and refining iron ores with just electricity. This would be a massive progress for the world, as green electricity could be used directly, without costly conversion to hydrogen, and would overall reduce global carbon emission massively.
They published this research in ACS Energy Letters1, under the title “Pathways to Electrochemical Ironmaking at Scale Via the Direct Reduction of Fe2O3”.
Iron Ore To Iron Metal
Iron is found in nature in oxidized form, notably hematite (Fe2O3). To be useful as an industrial metal, the oxygen atoms need to be removed.
Normally, this is done by adding coal, with the carbon it contains turning into CO2. Alternatively, green iron uses hydrogen that turns into water (H2O).
Another option is to give the iron oxide enough energy for the oxygen atom to separate and form gaseous oxygen (O2). This is the idea behind electrochemical iron-making. This is an electrochemical reaction that works best in alkaline conditions (the opposite of acidic).
Source: ACS Energy Letters
It should be noted that this process also needs to be very scalable, as the yearly global production of iron is the million-tonne-per-year scale.
Iron Electroreduction
To test how to make this type of reaction more efficient, the researchers designed a custom system working a little like a battery, and operating at just 82°C (180°F).
Source: ACS Energy Letters
In this setup, the iron particles are suspended in a sodium hydroxide (NaOH) solution, but molten salt (NaCl) is also possible and can produce chlorine (Cl2) as a byproduct.
Dense iron oxides were reduced, or converted into elemental iron, most selectively at a current density of 50 milliamperes per square centimeter, similar to rapidly charging lithium-ion batteries.
They discovered that while the process worked well with test iron particles when using natural ore with irregularly sized, dense particles and impurities, the process was not selective and efficient enough.
Finding The Right Conditions
A strange occurrence during the initial tests was that some particles would be turned into metal iron better than others, with no correlation to their size, contrary to expectations. So the researchers started to test if the nanoscopic structure of the particles could be a more important factor.
Micrometer-wide iron oxide particles with carbon and barium impurities were tested and did not reduce well enough.
Alternatively, loose particles with higher porosity, and thus higher surface area, facilitated more efficient electrochemical iron production, as compared to those made to resemble the less porous natural iron ore hematite.
Source: ACS Energy Letters
This could indicate that only some form of iron would be fit for this process.
“Identifying oxides which can be converted to iron metal at low temperatures is an important step in developing fully electrified processes for steel making.”
Paul Kempler – Lead researcher at the University of Oregon
Making Iron Electroreduction Competitive
Despite this limitation, iron electroreduction could still work from an economic point of view. This is because the method uses a lot less power and lower temperature, reducing the overall cost of iron production.
With this procedure, the iron production would cost around $600/ton. This is relatively economical, but not perfect compared to the levelized cost of steel produced in the blast furnace/basic oxygen furnace process, recently estimated as about $400/ton.
An additional step for further profitability could be to combine iron reduction with chemical production. The iron-making electro-cells could be combined with chlorine production cells to form a chlore-iron production unit, which could be installed in series to make an entire production plant.
Source: ACS Energy Letters
When taking into account the production of Cl2, a very useful chemical used in massive quantities by the chemical industry, the economics of the operations are looking better, likely bringing it much closer to blast furnace costs.
Further Improvements
The issue with depending only on ore with the right nanoscale structures is that it could severely limit the potential for widespread adoption of this technology, even if the economics are favorable. Overall, it is unlikely that redesigning the entirety of the iron-mining industry, which produces a lot of hematite with low porosity is realistic.
An alternative could be new techniques to make iron oxide feedstocks more porous, potentially through the use of electricity or thermal shock.
Iron Mining Company
Vale
A decrease in iron smelting costs and carbon emissions could make steel an even more popular material than it is today. When it comes to mining, scale and good geology are everything, with low production costs allowing for higher profits and safety during downturns, which are inevitable in commodity markets.
The Brazilian company Vale is the world’s largest producer of iron and nickel, with a total of 323-330 million tons produced in 2024.
The company is also a producer of metals relevant to the energy transition like copper. While these metals might become more important in the future, for now, iron is the core of the company.
The company used to be more diversified but re-centered around iron in recent years, having divested $2B worth of various other metal mines and other commodities like palm oil.
Source: Vale
Large Asset Base
Vale qualifies as a medium-sized utility company, operating its own railroad, trains, harbors, and ships to transport ore from extraction to delivery to customers.
It also produces a lot of its own energy, as it operates in remote regions and cannot depend on the Brazilian government to do its job properly, especially considering its massive power requirements.
This was commonly done with hydropower, as the business of mining is not so different from hydropower construction (earthworks, digging rock with explosives, massive amounts of concrete, heavy machinery, mega construction projects, managing rain, etc.).
These infrastructures are complemented by the company’s R&D center, laboratories, hundreds of geologists, training centers, etc.
Getting Over Past Liabilities
One big risk with a massive mining company like Vale is a massive accident causing massive damage.
This is what happened in 2015, with a massive disaster that occurred after a Vale-built dam collapsed. And then a similar incident in 2019.
The flooding caused Brazil’s worst environmental disaster to date, killing 19 people, and affected 39 municipalities across two states, burying them in mining waste products.
Since then, a lot of similar dams have been repaired and/or improved to avoid another catastrophe during the rainy season.
The company has also changed how it operates, having invested $2.5B in four filtration plants to create dry tailing (the crushed rock, dust, and mud) instead of wet tailing requiring dams. So in the future, iron mining activity will no longer create the sort of waste that requires dams at all.
The company is also actively repairing its image, insisting on how its mining activity created a large natural reserve financed by the company, which is a major contributor to preserving the Brazilian rainforest, with the rest of the region turned into pasture in the past decades.
Source: Vale
Overall, Vale is now getting over its past trouble with ecological disasters and turning into one of Brazil’s most valuable assets and a central supplier of iron to the world, and China in particular, a country with whom Brazil is forging deeper ties through the BRICS commercial network and in the context of mounting tariffs and tensions with the USA.
Latest on Vale
Studies Referenced:
1. Anastasiia Konovalovaet al. (2025). Pathways to Electrochemical Ironmaking at Scale Via the Direct Reduction of Fe2O3. ACS Energy LettersVol 10/Issue 4. https://pubs.acs.org/doi/10.1021/acsenergylett.5c00166