Oman's Public Authority for Special Economic Zones and Free Zones (Opaz) has signed an agreement with Kobe Steel, a leading Japanese steel manufacturer, and Mitsui & Company, a global trading investment company for setting up a low CO2 iron metallics project in the special economic zone at Duqm.

As per the deal, the duo will commercialise the manufacture and sale of direct reduced iron (DRI) produced through Kobe Steel’s Midrex Process in co-ordination with Opaz.

Under this Midrex Process, the iron oxide gets converted into DRI inside the shaft furnace using hydrogen-rich gas coming from natural gas or hydrogen as a reducing agent. Over 90 such Midrex plants are in operation across the globe.

The deal comes at a time when the steel industry is working on reduction of CO2 emissions to address climate change. Kobe Steel Group (also known as Kobelco Group) set the vision for 2050 in May 2021, aiming to achieve carbon neutrality in its production process and contribute to over 100 million tonnes of CO2 emission reduction through its technologies, products, and services.

The group has already verified the technology that can reduce a significant amount of CO2 emissions from blast furnace operations leveraging its collective strength of diverse businesses.

Kobe Steel said it has, along with Mitsui, sealed a land reservation agreement with Port of Duqm Company (PODC), the entity that operates the Omani port.

The Japanese groups also held discussions with the Oman’s Ministry of Energy and Minerals on detailed condition for natural gas supply.

Having confirmed the site and cooperative framework in Sezad, Kobe Steel and Mitsui will now move the feasibility study forward, it added.

According to Kobe Steel, the project aims to produce 5 million tonnes of DRI - the feed stock for steelmaking that can also be used in electric arc and blast furnaces as well as basic oxygen furnace melt shops - with a future expansion plan under study.

Kobe Steel pointed out that it was the first Japanese company that had commercialized low CO2 blast furnace steel products with the launch of its Kobenable Steel.

In the field of DRI, the Japanese group has commercialised unique technologies such as Midrex Flex that can be transitioned to 100% hydrogen and Midrex H2 using 100% hydrogen as a reducing agent, in addition to Midrex NG, which uses natural gas.

It is working proactively toward decarbonization of the steel industry and carbon neutrality with combination of steelmaking experience, key technologies such as Midrex Process, and the collective strength of Mitsui operating global business in the natural resources and energy fields, it added.

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