Rio Tinto has signed a Memorandum of Understanding with Indian steel producer Jindal Steel and Power Limited (JSPL) to use the HIsmelt technology in a fully integrated steel making facility.

 

HIsmelt, short for high-intensity smelting, is the world's first commercial direct smelting process for making iron straight from the ore. The technology, fully owned by Rio Tinto, smelts iron ore fines directly using non-coking coals, and offers significant economic and environmental benefits to the steel industry.

 

The MoU will  involve the dismantlling and relocation of the existing Kwinana HIsmelt plant from Australia to India at JSPL's existing facility in Angul, Orissa. The relocated plant will be fully owned by JSPL, and JSPL and Rio Tinto will work together to further develop and market the technology. The Kwinana HIsmelt plant is owned by a Joint Venture comprising Rio Tinto (60 per cent), Nucor Corporation (25 per cent), Mitsubishi Corporation (10 per cent) and Shougang Corporation (5 per cent).

 

The MOU was signed in New Delhi by Naveen Jindal, JSPL chairman and managing director Naveen Jindal and Rio Tinto Iron Ore and Australia chief executive Sam Walsh in the presence of Australia's High Commissioner to India Peter Varghese.

 

JSPL is part of the US$15 billion Indian-based Jindal Group, currently producing three million tonnes of steel annually and 1,800 megawatts of power.

 

Mr Walsh described the deal with JSPL as a natural progression for the HIsmelt technology. "This opportunity with JSPL is exciting, as we integrate the HIsmelt flow sheet into their existing steel works in Orissa, an acceleration of proving of the technology to full design capacity.

 

"We believe the HIsmelt process remains the future for iron making, particularly in locations where the need to reduce the environmental footprint is increasing, thereby ensuring the ongoing sustainability of this essential industry.

 

"HIsmelt is suitable to the resources of India and offers huge environmental benefits to a steelmaker like JSPL."

 

Naveen Jindal said "JSPL has had strong interest in the HIsmelt technology for several years and now looks forward to finalising the development of this most exciting technology and to share in the future benefits."

 

The decision to build the expanded commercial HISmelt plant at Kwinana was taken in April 2002,  with financial support from both the Australian and WA governments, following  a $600 million Australian research and development program, conducted over twenty years.

 

In April 2009, Rio Tinto and its joint venture partners placed the Kwinana Hismelt project on a program of 12 months' care and maintenance to April 2010, due to depressed global pig iron prices and poor market outlook, and in December 2010, December the HIsmelt joint venture partners agreed to permanently close the Kwinana site and terminate the joint venture.

 

Rio Tinto is continuing its Kwinana site obligations, some of which apply to December 2012, in accordance with conditions set by the state regulators and Invest Australia.