Ferrexpo, Germany's Salzgitter agree to expand supply of DRI pellets for 'green' steel

MOSCOW. May 24 (Interfax) - Ferrexpo plc, a mining company with its main assets in Ukraine, and Salzgitter Flachstahl GmbH, a subsidiary of Germany's Salzgitter AG metals company, have signed a memorandum of understanding on supplying iron ore pellets utilizing direct reduced iron (DRI) technology in order to produce low-carbon steel, Ukrainian media reported, citing the companies' respective announcements on the stock exchange.

The memorandum on utilizing the pellets in the Salzgitter program, SALCOS, Salzgitter Low CO2-Steelmaking, envisages implementing decarbonization plans, as well as jointly developing strategies to utilize raw materials within environmentally friendly supply chains.

"We have agreed the terms of our cooperation for the future. Ferrexpo's DRI iron ore pellets should significantly reduce emissions in steel production as part of the SALCOS program," Ferrexpo Acting Marketing Director Yaroslavna Blonskaya said.

Salzgitter Flachstahl Technical Director Gerd Baresch expressed hope for increased cooperation within the SALCOS program. "The agreement reached will help us reduce carbon emissions in our supply chains and incentivize the production of environmentally friendly steel," Bares said.

The SALCOS program should be technically complete by 2033.